Reflective materials leading enterprises, the layout of the industrial chain continues to improve. TD Optics is a leading enterprise of reflective materials in China, at present, the company's main business can be divided into glass bead road safety protection materials and products (individuals, vehicles, etc.), micro / nano prism reflective materials and products, lithium ion battery packaging materials, optoelectronic thin films / plates, high performance release materials and other plates, is the leading functional film material enterprise in China.
Domestic replacement of micro-prism film, license plate film benefits from process upgrading. The company's micro-prism film broke the foreign monopoly, achieving an income of 267 million yuan in 2019, an increase of 47% over the same period last year, and a gross profit margin of 60%. At present, the company's domestic market share is about 10%. With the acceleration of the domestic substitution process, the company will quickly seize the market by virtue of its core technology and rich product business. In the context of the upgrading of the license plate film industry, the company changed from a license plate film supplier to a license plate semi-finished product supplier, and won a multi-site license plate film and semi-finished product project in 2019. The sales revenue of license plate films and semi-finished products reached 255 million in 2019, an increase of 30.10% over the same period in 2018, accounting for about 30% of the market share.
The business of brightening film is expected to usher in an inflection point, and the volume of quantum dot film will bring new growth. The brightening film is used in the backlight module of LCD LCD panel, with the repair of demand brought about by economic recovery, and the withdrawal of low-generation production lines in Japan and South Korea, LCD panel prices are expected to continue to pick up, we believe that Huawei new materials brightening film business is expected to usher in repair. In addition, the quantum dot film of Huawei New Materials was formed and sold in 2019. At present, the main customer is TCL. With the active development of downstream customers, the company's sales are expected to increase.
The new PC/PMMA project contributes to the growth of performance. With the comprehensive popularization of 5G communications and other technologies, the market puts forward new requirements for mobile phone backplane materials. PC/PMAA is expected to become the mainstream mobile phone backplane material in the future because of its own advantages, and its market is expected to exceed 15 billion yuan. In 2019, the company added an annual output of 10 million square meters of optical grade PC/PMMA co-extruded film / sheet production line construction project, the main target customers are Tongda Holdings, Intelligent Power, Jinrui new materials and other mobile phone back cover production enterprises, it is expected that the volume of PC/PMMA project will bring performance growth.
Profit forecast and investment suggestion
We estimate that the return net profit of the company from 2020 to 2022 is 250 million yuan, 350 million yuan and 430 million yuan respectively, and the EPS is 0.4,0.56 yuan and 0.69 yuan respectively. We give the company 30 times PE in 2020, with a target price of 12 yuan. Coverage for the first time, giving a "overweight" rating.
Risk hint
The progress of domestic substitution is not as expected; the recovery of panel demand is not as expected; the development of new projects is not as expected; the pledge risk of major shareholders; the risk of lifting the ban