Hangjin Technology announced that it is expected to make a profit of 290 million yuan to 330 million yuan in 2019, down 34% by 42% compared with the same period last year.
Main points of investment:
The chemical sector is a drag on performance, while the integrated circuit sector is outstanding. The company's performance declined, on the one hand, the disposal income of available-for-sale financial assets was 82 million yuan in the same period last year, on the other hand, affected by the decline in the prices of products such as caustic soda, profits in the chemical sector fell 51% by 57% compared with the same period last year.
At the same time, benefiting from the growth in demand for products and the batch supply of the company's new products, the company's integrated circuit sector has an outstanding performance, with an estimated net profit of 160 million-180 million, an increase of 37%, 54% over the same period last year. The integrated circuit sector has become the company's main source of profit.
Adjust the strategy and change the organizational structure, and be optimistic about the development prospect of the company's integrated circuit plate. The company adjusted the development strategy of the electronic plate from the integration of the upstream and downstream of the industrial chain to a professional enterprise to build dual-use chips for military and civilian use, and accordingly adjusted the organizational structure and integrated resources of the integrated circuit plate on the platform of Changsha Shaoguang. With the vigorous promotion of the Anke project and the double historical opportunity of the localization of Huawei's supply chain, with the successive landing of important new products such as a new generation of GPU and RF materials / devices, the company's integrated circuit business will achieve the transformation from a single military product to both military and civilian products, ushering in a new round of growth.
Profit forecast and investment rating: maintain the overweight rating. Major uncertainties of the company have landed one after another, and in the future, with the incremental business contribution of the chemical sector, new products of the integrated circuit plate will begin to develop in key areas such as military industry and 5G, the company's business structure will be more optimized and robust, and the main industry of integrated circuits will be more prominent. The company is expected to achieve high growth under the new strategy. Chemical products performance decline, one-time fees increased, 2019-2021 net profit is expected to be 316 million yuan, 440 million yuan and 527 million yuan, respectively, the corresponding EPS is 0.46 yuan, 0.64 yuan and 0.76 yuan, respectively, corresponding to the previous share price PE is 26 times, 19 times and 16 times, optimistic about the future performance rebound and integrated circuit sector prospects, maintain overweight rating.
Risk tips: the development of the investment subsidiary is not as expected; the debt restructuring is not as expected; the chemical business is stabilizing less than expected; the company's profit is not as expected.
