Key elements of the report:
Chengtian Weiye was founded in 2006 and has developed into an international leading high-tech enterprise of smart card products, services and special chips. The company's main products are smart card products and embedded smart card special chips, and provide smart card integrated business card printing services. The scale of the smart card market will increase in the future.
The development of 5G technology and the continuous promotion of EMV migration will continue to drive the demand for smart cards. At the same time, the company set up a chip company in Ningbo, which will open up the industrial chain and reshape the industry competition and cooperation ecology.
Main points of investment:
Throughout all links of the industry chain, focus on intelligent value range: the company starts from the traditional business card printing advantages, card position smart card chip design and manufacturing field. Upstream cooperation with suppliers is stable, economies of scale advantages continue to improve; downstream deep binding customers, the company's industry qualifications are perfect, market demand responds quickly, and continues to accumulate high-quality customers for the company.
Extend the chip link and focus on endogenous growth: China's smart card market is growing rapidly and the scale is constantly expanding; the reform of communication technology will increase the demand for communication smart cards, and the increment brought by financial IC cards will also improve the company's performance. On the other hand, the establishment of a chip company will open up the industrial chain, thicken the company's performance, and reshape the industry competition and cooperation ecology. Chip companies have the production capacity of ESIM cards and are expected to enjoy the development dividend of ESIM cards and have a broad market space.
Integrate transnational resources and further expand overseas business: the company actively carries out industrial layout in India and Indonesia and sets up subsidiaries to engage in smart card business. The market capacity of India and Indonesia will further open up overseas markets. In recent years, the company's overseas revenue has been rising, and has become an important beneficiary of global trade.
Profit forecast and investment suggestions: the company is expected to achieve net profit of 46.32 million yuan, 55.9 million yuan and 75.84 million yuan respectively in 19-21 years, and the corresponding EPS is 0.68,0.82,1.12 yuan respectively, and the PE of the corresponding stock price is 60 times, 50 times and 37 times respectively. The company focuses on smart card business, mobile communication technology enhances the demand for communication smart cards, coupled with the increment of financial IC cards brought about by EMV migration, there is a broad space for the development of the global smart card market. On the other hand, the commissioning of Chengtian Weiye chip project will thicken the company's performance and is expected to enjoy the future ESIM card market development dividend. Corresponding to the company's current stock price, we believe that the company is relatively undervalued, so for the first time it covers the "overweight" rating given to the company.
Risk factors: market risk, overseas business risk, technical risk and so on.
