Star Technology is an established manufacturer of glass covers with a wide range of layouts in areas such as glass covers and plastic structures. We believe that the company's "one-stop integration", "two main lines" and "four major advantages" will help the company reverse its performance and take off quickly.
"one-stop integration": the company has carried out an extensive layout in the consumer electronics terminal industry chain, with three core businesses of glass cover, touch module and structural components, to realize the one-stop integration of the consumer electronics industry chain.
"two main lines":
Smartwatch sales are expected to exceed 100 million, both performance and appearance of 3D glass cover has become the first choice of smartwatch; car display will also break out quickly, both of which will fully boost the demand for 3D glass cover.
The wave of de-metallization of the back cover of the mobile phone in the 5G era has arrived, and the plastic back cover with high quality and low price is expected to emerge as a new force and quickly replace the market share of the metal back cover, and the market space for the plastic back cover is broad.
"four advantages":
Glass cover technology and track advantages: the company has ploughed glass cover technology for many years and independently developed a number of core technologies for 3D glass production. With the expansion of 3D glass production capacity, the company is expected to overtake on the new track with wearable and on-board display.
Advantage of plastic back cover scale: subsidiary Lianmao is the leader of plastic structural parts, and the company's plastic back cover scale is further expanded after the acquisition of Guangbao and Jinsheng Communication.
The "Pingxiang effect" helps the company reduce costs: the major shareholder, Pingxiang Economic Development District, helps the company settle in Pingxiang, and a number of preferential policies reduce the company's operating costs.
Customer resource advantage: the company is already a flagship supplier of first-tier brands such as Huawei and will receive more support in the context of trade frictions.
Profit forecast and investment rating: from 2019 to 2021, the company is expected to achieve a total operating income of 6.35 billion yuan, 9.75 billion yuan and 11.84 billion yuan, a net profit of 165 million yuan, 374 million yuan and 552 million yuan, and an EPS of 0.17,0.39 and 0.58 yuan, respectively. According to the comparable company valuation, the company will be given 25 times PE in 2020, corresponding to the target price of 9.75 yuan. Cover for the first time, giving a "highly recommended" rating.
Risk tips: 5G infrastructure construction is not as expected, pneumonia epidemic led to consumer electronics terminals to resume work less than expected, the company's capacity climbing is not as expected, and so on.