Core viewpoints
5G electromagnetic shielding thermal conductivity increment is significant, and the domestic trend is clear: the company ploughs electromagnetic shielding, thermal conductive materials and devices, provides customers with integrated application solution services, leading material and device technology, and comprehensive product layout. The demand for electromagnetic shielding and heat dissipation of 5G smart phones has been significantly upgraded, promoting the increase in the amount of electromagnetic shielding and heat conduction devices, the upgrading of materials and technology, and the diversification of solutions, and the market scale is expected to grow by more than 20 billion yuan. In the future, as large overseas companies continue to expand production and lack of motivation for R & D expenditure, with the close service advantage of customized products with high-end customers, the company is expected to further benefit from the trend of localization and consolidate its leading position in the electromagnetic shielding and heat conduction industry.
Endoepitaxial perfect 5G product line layout: 1) the company has innovated and developed a new generation of selective electroplating process for plastic antenna diaphragm. In the future, with the gradual determination of the technical route of 5G base station industry, it is expected to become the mainstream technology of 5G base station antenna oscillator. Bring new performance growth points for the company. 2) centering on the field of communications and consumer electronics, the company has acquired three companies with technological advantages, namely, Bowei (base station antenna), Runxingtai (semi-solid die casting) and Pindai (heat dissipation module), to integrate the upstream and downstream of the 5G industrial chain and expand the product line. The target company's technological advantages with Fei Rongda's customer advantages are expected to form efficient synergy and achieve sustainable growth.
The fixed increase and landing opens the space for 5G growth: the company raises 700 million yuan through a private offering of A shares, invests in the industrialization project of 5G communication devices, and upgrades and expands the production of 5G radome, antenna vibrator and related structural components. On the one hand, it further enhances the technological advantages of the company's 5G products and its synergy with the main industry of electromagnetic shielding heat conduction; on the other hand, it continues to promote the company's technological innovation, industrial innovation and operational capacity. Improve the company's profitability on the basis of constantly improving the product structure, and lay a sufficient foundation for the arrival of the 5G era.
Financial forecasts and investment suggestions
We predict that the company's 20-22 EPS is 0.85,1.23 and 1.51 yuan respectively (the original forecast 20-21 EPS is 1.03,1.39 yuan respectively, the adjustment is due to additional dilution and dividend removal, while electromagnetic shielding thermal conduction customers and product development exceed expectations, antenna vibrators continue to ship in bulk), according to comparable companies to give the company 20 years 46 times PE valuation, corresponding to the target price of 39.1 yuan, to maintain the buy rating.
Risk hint
The progress of product line expansion is not as expected; the commercial progress of 5G is not as expected; the performance commitment is not as expected.