Daoming optical materials leading enterprises, the original ordinary glass beads reflective materials leading the country, while breaking technical barriers to achieve high-end micro-nano prism film localization, in recent years, with high-margin micro-prism products to 3M Company and other enterprises to achieve domestic substitution, at the same time mergers and acquisitions of Huawei new materials horizontally expanded to the upper reaches of liquid crystal display panels, the company's operating income and net profit increased steadily. In the future, with the breakthrough of domestic substitution in the fields of reflective materials, lithium materials, liquid crystal display materials and consumer electronics, the company is expected to enter a period of rapid development.
The leading position of reflective materials is stable, and the growth of domestic micro-prism films is accelerated.
The company is the absolute leader of domestic reflective materials, the products cover personal safety, road safety, vehicle safety and other fields, is the only mass production of micro-nano prism reflective film production enterprises. Taking advantage of the product price, the company is gradually realizing domestic substitution to the international giants of reflective materials such as 3M Company. In 2019, the market scale of reflective materials in China reached 8.5 billion yuan, of which the market size of microprism reflective films was about 3 billion yuan. the company's market share of reflective materials in 2019 was about 11%, of which the market share of microprism reflective materials was about 9%. With the continuous upgrading of the company's products in the future, it is expected to continue to occupy the high-end market.
Aluminum-plastic film to achieve a breakthrough to help the localization of soft-package power batteries.
Aluminum-plastic film is the last of the four key core components of flexible batteries, which has not yet been replaced by domestic products. the core technology and market are monopolized by enterprises such as Japan and South Korea, and the current domestic production rate is less than 20%. Domestic enterprises such as TD Optics, Xinlun Technology and Pu Tailai have begun to make breakthroughs in aluminum-plastic film in recent years. In 2019, the company's sales revenue of aluminum-plastic film was about 51 million yuan, an increase of about 20% over the same period last year, ranking among the top three in the country. In 2019, the domestic demand for aluminum-plastic film is about 110 million yen, and the market size is more than 1 billion yuan. with the increase of the proportion of soft-package batteries in the field of power batteries, the market scale is expected to further improve.
Deeply bind TCL to benefit from the acceleration of LCD localization.
Since 2018, with the release of LCD capacity of large panel production companies such as BOE and TCL, Samsung and LGD production capacity have been withdrawn, global LCD panel capacity will be further concentrated to Chinese mainland, as TCL, Skyworth and other core liquid crystal membrane material suppliers, will fully benefit from the acceleration of LCD localization. LCD liquid crystal display module must contain two polarizers, one polarizer requires five layers of optical film, according to the current market price of reflection film, diffusion film, brightening film 5 yuan, 6 yuan, 11 yuan / square meter, the global demand for optical film for backlight module in LCD is 755 million square meters, and the market scale is nearly 6 billion yuan.
PC/PMMA composite materials put into production, mobile phone backplane business is expected to break through.
The company's 1000 million tons / a production capacity of PC/PMMA composite film / plate was completed at the beginning of the year, on the one hand, it can ensure the supply of core raw materials for microprism reflective materials, and at the same time, it has entered the terminal test in the fields of mobile phone, notebook computer backplane, car lightweight and so on, and there are now small batch orders. There are 1.371 billion smartphones shipped worldwide in 2019, of which the middle and low-end products are calculated according to 1 billion units, and the value of the single phone is about 15-20 yuan, corresponding to 15-20 billion market space. As the company's products pass the terminal certification, the profitability will be further enhanced.
Investment suggestion
We estimate that the company's operating income from 2020 to 2022 will be 15.53 yuan 18.48 yuan / 2.157 billion yuan respectively, the net profit returned to the mother will be 2.90 hundred and forty-four hundred million yuan respectively, and the EPS will be 0.54 billion yuan respectively. The current share price is 9.41 yuan, which is times higher than that of 20-17-14. Comparable company 2020-2022 average PE is 50-35-29 times, the company for the domestic membrane materials leading enterprises, relying on reflective materials, vigorously horizontal development of lithium, liquid crystal panels, consumer electronics and other plates, in the future the company will rely on technology reserves in the field of high-end membrane materials for domestic substitution. Considering that the company is expected to enter the stage of rapid growth in the future wave of domestic substitution, we are optimistic about the future growth of the company and give the company 30 times PE in 2020, corresponding to the target price of 13.80 yuan. Cover for the first time, giving a "buy" rating.
Risk hint
Risks such as raw material price fluctuation, product volume not as expected, product price fluctuation and so on.