Event: the company issued an annual performance forecast for 2019, which is expected to achieve a net profit of 7500-90.81 million yuan in 2019, an increase of 36.29% 65.02% over the same period last year.
The prosperity of the industry is high, and the performance has achieved high growth. The company's 19-year performance returned to growth, mainly due to the high prosperity of the industry, a sharp increase in the paint sector compared with the same period last year, and some performance growth in the ink sector. as well as Hunan Sunshine in October 2018, Dongguan Hangsheng in January 2019 and profits from government subsidies and debt restructuring, it is estimated that the company's non-recurrent profit and loss in 2019 is about 1900-21 million.
The company forms the common development pattern of printing ink, professional paint and new energy materials. The company expands its business areas and product structure, Dongguan Hangsheng focuses on the development of high-performance lithium electronic battery electrolyte, the company acquires it to enter the new energy field, while its subsidiary Jiangsu Hongtai acquires Hunan Sunshine to develop UV new materials business. The advent of the 5G era will bring business opportunities for the company, the company is the leading domestic paint and ink manufacturing companies, the company's wholly-owned subsidiary Jiangsu Hongtai Huawei and OPPO smartphone paint suppliers, and the company pays attention to research and development, the newly developed products include inks and coatings for 5G communications, due to the high-speed and high-frequency characteristics of 5G, the requirements for PCB boards will be increased, so it is predicted that the demand for PCB inks will increase. And under the promotion of strict environmental protection, traditional coatings are expected to be eliminated quickly because of serious pollution. The company's light-cured coatings will get new applications according to their environmentally friendly and convenient characteristics, and the plate has great potential for development.
The completion of the photosensitive new material project is expected to support the sustained growth of performance. The company's IPO investment project "annual output of 8000 tons of photosensitive new materials project" was completed in late October 19, and passed the project acceptance is about to enter the commissioning stage. In addition to raising production capacity, the company's original annual ink production capacity of 6500 tons, ranking first in China, is now full production and sales, the launch of the new project will effectively break through the capacity bottleneck and meet customer demand. After the project is put into production, the scale effect brought about by capacity expansion will further reduce the unit production cost, which will help to improve the company's market competitiveness and profitability, and will have a positive impact on the company's future business performance. With the gradual release of production capacity, equipment and technology improvement, will greatly improve the company's product quality, the company will continue the growth path, ink market share is expected to be further improved.
Maintain the "prudent recommendation-A" investment rating. We expect the company to achieve revenue of 792 million, 1.005 billion and 1.264 billion, and return to home net profit of 87 million, 123 million and 161 million in 19-21, with PE of 43 times, 31 times and 23 times, respectively, maintaining the "prudent recommendation-A" investment rating.
Risk tips: the risk of whether the new production capacity can successfully open up the market; the risk of raw material price fluctuations; the risk of intensified market competition.