This report is read as follows:
The penetration rate of 5G is accelerated, and the demand for heat dissipation of mobile phones is doubled. The company is based on thermal conductive graphite, the layout of heat pipe / VC to meet the industry dividend, and ceramic / glass cover plate is also in the near future. For the first time, the "overweight" rating was given, with a target price of 35.50 yuan.
Main points of investment:
For the first time, the "overweight" rating was given, with a target price of 35.50 yuan. The market is worried that smartphones will enter the stock market, the competition in the cooling market is fierce, and the price downward pressure is great, but we think that 5G will bring a doubling of demand in the cooling industry, and the company will actively lay out the heat pipe and soaking plate (VC) field, which will soon enjoy a new round of industry dividend. It is estimated that the company's revenue from 2019 to 2021 is 5.60,16.60 and 2.365 billion yuan respectively, and the net profit from 2019 to 2021 is 0.06,1.48 and 249 million yuan, respectively, corresponding to 0.03,0.71,1.18 yuan for EPS. Combined with comparable companies and their own growth rate, give the target price 35.50 yuan, corresponding to the 2020 PE 50 times, for the first time to cover the "overweight" rating.
With high thermal conductivity graphite material as the core, we actively expand the fields of heat pipe / VC, ceramic / glass cover plate and so on. The company's revenue in 2012 was 542 million yuan, with a compound growth rate of 24.48% from 2018 to 2018, maintaining rapid growth. The net profit performance is weak due to the influence of gross profit margin and expenses. The company's products are mainly high thermal conductivity graphite film series products, customers including Huawei, Samsung, OPPO, etc., of which high thermal conductivity graphite film revenue of 507 million yuan in 2018, accounting for 93.52% of revenue, occupies a leading position in the graphite field. In recent years, the company has actively increased its R & D investment, and it is expected that the business of 5G heat dissipation plate and ceramic cover plate will achieve a breakthrough from 0 to N in 2020.
5G gradually landed, actively expand production to meet the industry dividend. The penetration rate of 5G is accelerating, and IDC predicts that sales of 5G mobile phones will grow at a compound annual growth rate of 180% from 2019 to 2023, and will exceed 700 million by 2023. Due to the higher demand for heat dissipation of consumer electronic products such as smartphones in the context of 5G, the demand for mobile phone heat dissipation industry has increased significantly, and the market potential is huge. The company relies on high thermal conductivity graphite film to actively expand VC business. At present, the company VC is progressing smoothly in Huawei's 5G mobile phone supply chain and will begin to enjoy industry dividends in 2020.
Catalyst: 5G industry policy landing, 5G mobile phone press conference
Risk hint: sales of 5G mobile phones fall short of expectations; competition in the industry intensifies and product prices decline