Qingyi Optoelectronics is one of the earliest and largest mask manufacturers in China, and its main products are quartz mask and soda mask. The company has ploughed the mask industry for more than 20 years and has a total of 21 core technologies. The current mask downstream market: panel semiconductors are continuing to transfer to China, which will lead the company's long-term development in the future.
Domestic mask leader, years of deep ploughing industry to break through the core technology: Qingyi Optoelectronics is mainly engaged in mask research and development, design, production and sales, is one of the earliest and largest mask manufacturers in China.
The main products are quartz mask and soda mask. The company's revenue in the first three quarters of 2019 was 349 million yuan, an increase of 17.32% over the same period last year, and the gross profit margin and net profit margin remained high. The company has invested in R & D for many years and has a number of patents and core process technologies.
Technology evolution + import substitution opens the growth space of the domestic mask industry: with the development of technology, the mask version is developing in the direction of high precision and large size, and the players in the industry also begin to extend to the upper reaches of the industrial chain. At the same time, several major downstream markets of masks, such as flat panel displays and semiconductors, are continuing to shift to China, and the demand for masks in China accounts for a rising proportion of the world. In terms of panels, BOE, Huaxing Optoelectronics, Vicino and other manufacturers continue to expand production, China's panel mask demand will account for 56% of the global market share. In terms of semiconductors, China's industry grew by 11.8% in the first half of 2019, down 12.25% from the same period last year compared with the global market. In addition, flexible circuit boards are in a period of rapid development, and the field of mask for flexible circuit boards will usher in new opportunities for development.
Based on the core customers of panel packaging, independent research and development to break through technical barriers: the company has focused on mask development for more than 20 years, constantly improving and improving the level of technology in production practice, and committed to the research and development of new masks. At present, the company's research projects include large-size and high-precision mask coating project, 8.5G HTM process project, high-precision SiP system-level and wafer-level packaging mask process project and so on. Downstream customers are mainly leading manufacturers in the field of panels and semiconductor packaging, including BOE, Tianma Microelectronics and so on. Compared with its competitors, the company has a higher R & D expense rate and promotes the iteration of product renewal based on its accumulated strength.
Fund-raising project analysis: improve the localization of the industry, accelerate the iteration of product renewal: Qingyi Optoelectronics issued 66.8 million new shares, raising a total of 587 million yuan. Mainly used for 8.5 generation and below high-precision mask projects and mask technology R & D center projects. The mask production base is located in Hefei. after the completion of the project, it will achieve an annual production capacity of 1852 masks, which can effectively meet the needs of local BOE, Vicino and other panel factories, and form a positive interaction with downstream customers. At the same time, speed up the research and development of new products and processes represented by HTM, OPC, PSM and other technologies, and actively promote the industrialization of achievements.
Valuation analysis: we predict that the annual return net profit of Qingyi Optoelectronics in 19-20-21 will be 0.71 max 0.9 billion yuan.
Corresponding to the post-release EPS 0.27 Universe 0.30 Universe 0.34 yuan. Combined with the comparable valuation of similar companies in A shares and the potential valuation premium of Science and Technology Innovation Board, we think that the reasonable valuation range is 40-60 times the dynamic PE in 19 years, corresponding to the market capitalization of 28.35-4.253 billion yuan and the target price of 11-16 yuan.
Risk hint: technical risk, risk of asset management, risk of relative concentration of major suppliers and customers, risk of fluctuation of raw material prices, greater risk of accounts receivable, etc.
