The upstart of 5G base station antenna filter to meet the new opportunities of 5G industry
The company's traditional main business is precision box system business. after 18 years of acquisition of Bofat, it has successfully expanded into the field of mobile communications, with a substantial increase in revenue and net profit. We are optimistic about the future growth of the company: 1) with the deep coverage of 4G network and the acceleration of 5G base station construction by domestic and overseas operators, the market demand for mobile communication products is strong, it is expected to promote a substantial increase in revenue; 2) Vertical layout of new products-continuous R & D investment in ceramic dielectric filter technology, horizontal expansion of new customers-smoothly enter Ericsson supplier system and open up incremental market. 3) the business performance of the traditional precision box system has hit bottom and rebounded, and the future business may be driven by beneficial policies to drive stable growth. We estimate that the company's EPS for 2019-2021 will be 0.90 pound 1.57 plus 1.92 yuan respectively, giving a "buy" rating for the first time.
5G Commercial promotes the substantial growth of the Market scale of Antenna Radio end
The overall improvement of bandwidth, delay, synchronization and other performance in the 5G era has greatly promoted the upgrading of antenna radio-frequency technology. As a whole, large-scale array antennas and antennas actively drive the overall wireless radio-frequency side value has greatly increased. According to estimates, we expect the space in the macro base station antenna market to reach 67.2-7.56 billion yuan per year during the peak construction period (2020-2022). Compared with the 4G construction period, the domestic market has an average annual growth rate of 32%. 48%. For the corresponding filter market, the market space of macro base station filter is expected to reach 51.6-5.94 billion yuan per year during the peak construction period (2020-2022). Compared with the 4G scale construction period, the average annual scale of the domestic market is 91% higher than that of the same period last year.
5G RF products have been supplied to Ericsson, and ceramic dielectric filters are waiting for the company to successfully expand into the field of mobile communications after its wholly-owned acquisition of Beaufort in 18 years, and completed additional issues to enhance antenna RF production capacity to meet the needs of the 5G market in the same year. 5G antenna miniaturization, integration and low-cost requirements promote the evolution of filter technology to ceramic media. Through the acquisition of 51% stake in Jetband Electronics and vertical layout of ceramic dielectric filter technology, the company has entered the testing stage of customer sample delivery. In terms of customers, the company was originally one of the main suppliers of antenna RF products of ZTE Corporation and Japan Electric Industry, and now it has successfully entered the Ericsson supplier system and is expected to open up the incremental market space.
Traditional business or policies such as the installation of elevators in old residential areas
In the traditional precision box system business, with the beginning of the effect of reducing costs and increasing efficiency, the operating performance of 19H1 has bottomed out and rebounded. On the whole, downstream demand is positively correlated with macroeconomic prosperity. At the policy level in the near future, the State Council has deployed to promote the accelerated transformation of old urban areas and the aging population to promote the installation or replacement of existing residential elevators. In the medium to long term, the company may benefit from policy-driven, business is expected to grow steadily.
5G antenna radio frequency upstart, the first coverage to give a "buy" rating, we estimate that the company's net profit from 2019 to 2021 will be 1.51, 264,324 million yuan, respectively, corresponding to EPS 0.90, 1.57, 1.92, and PE, respectively, 36, 20, 17x. At present, the average PE of comparable companies in the same industry in 2020 is 29x. Considering that the company is expected to expand more customers horizontally in the future and the ceramic dielectric filter can be successfully mass produced, we think that we can give the company the valuation level of PE 25-30x in 2020, corresponding to the target price of 39.2347.08 yuan, and give the "buy" rating for the first time.
Risk tips: 5G development is lower than expected; horizontal expansion customers are not as expected; self-developed ceramic dielectric filter scheme is not as expected.
