Core viewpoints
Wireless charging potential is unlimited, winding scheme is favored, winding equipment manufacturers will benefit. With the wake-up wireless charging trend of iPhones in 2017, major manufacturers have followed the introduction of wireless charging phones and devices, and the ecological use of the relevant scene is also in full swing; in terms of industry, the winding scheme has advantages over FPC and will become the main solution. We estimate that by 2020, global shipments of wireless charging devices will reach 1.185 billion, of which 1.02 billion major wireless charging smartphones will be shipped, with a penetration rate of 63%. The cumulative demand for actual winding machines will reach 3948 in 2017-2020.
The market leader of wireless charging winding machine will fully benefit from wireless charging dividend. With the deep accumulation in the field of CNC winding equipment, after nearly a year of research and development in 2017, the company has made a series of technical breakthroughs in hollow solenoid production equipment and greatly improved its accuracy and efficiency. It has established the market position of a new generation of wireless charging coil production equipment for mobile phones. At the same time, in 2017, the research and development of mobile phone wireless charging receiving coil winding equipment and transmitter coil winding equipment have achieved high customer satisfaction. In 2018, the company signed an equipment procurement contract with Kunshan Liantao Electronics (Lixun Precision subsidiary), which purchased a total of 365 wireless charging winding machines from Tanaka, with a total amount of 364 million yuan.
3D glass is favored in the beauty era, and the acquisition of ocean-going Xiangrui enters 3C "intelligent smart building". In 2018, the major mobile phone manufacturers have launched more than 10 models of 3D glass mobile phones, 3D glass is becoming more and more popular. In the upstream of the industry, the precision carving machine produced by COSCO Xiangrui belongs to the category of high-grade CNC machine tool industry supported by the state. At the same time, the new generation of 3D curved glass hot bending equipment in COSCO Xiangrui not only saves 3050% in energy consumption compared with the previous generation model, reduces mold material loss by more than 30%, but also increases production efficiency by 4050% on the basis of the previous generation model. We believe that the rise of 3D glass will increase the demand of upstream manufacturers for precision carving machines and hot benders, which will bring considerable performance growth to Cosco Xiangrui.
Financial forecasts and investment suggestions
Give a buy rating for the first time, with a target price of 31.62 yuan. We forecast that the company's earnings per share from 2018 to 2020 will be 1.02,1.74,2.65 yuan respectively. With reference to the comparable company valuations of wireless charging, glass carving machines and CNC numerical control equipment, we believe that the company will have a higher average growth rate in the next 3 years, giving a 30% valuation premium of 31 times PE in 18 years, corresponding to the target price of 31.62 yuan, and a buy rating for the first time.
Risk hint
Wireless charging mobile phone shipments are lower than expected; wireless charging winding machine shipments are lower than expected; glass carving machine demand is lower than expected; consumer electronics industry growth is lower than expected; goodwill is at risk of impairment.