The company forecasts that the total revenue in the first quarter is about 589 million yuan, an increase of about 30% over the same period last year and 18% compared with the same period last year; the net profit is 1500-24 million yuan, down 24.39% and 52.74% from the same period last year; after deducting non-recurring profits and losses, the net profit is about-1500 to-6 million yuan, reducing losses by about 200-11 million yuan over the same period last year.
The revenue side of 2019Q1 has improved significantly, and the communications business has grown by 54% compared with the same period last year.
The company's total 2019Q1 revenue increased by about 30% compared with the same period last year, and the month-on-month growth was about 18%. It can be estimated that the total revenue is about 588 million yuan. Among them, the marginal improvement of the main business of communications is obvious, with revenue growth of about 54% and month-on-month growth of about 38%. We believe that the improvement in revenue is mainly due to the continued construction and expansion of 4G in China. And 4G construction in overseas emerging markets; 2. The company's base station filter business has increased its share of core customers.
Deducting non-net profit to reduce loss compared with the same period last year, the range of loss significantly narrowed.
The non-recurrent profit and loss in the first quarter is expected to be 30 million yuan (49.02 million yuan in the same period last year), of which government subsidies decreased by about 32 million yuan compared with the same period last year. The non-net profit of 2017Q1/2018Q1/2019Q1 deduction is-3283, respectively, and the non-net profit of 2019Q1 deduction is significantly narrowed compared with the same period last year. We believe that with the climbing of production capacity and the divestiture of loss-making assets, the company's profitability is expected to improve significantly in the future. On the one hand, the improvement of capacity utilization helps to improve the gross profit margin of products; on the other hand, the divestiture of loss-making assets helps to reduce depreciation and amortization costs and reduce the drag on the main business performance. At present, the main reason why the deduction of non-net profit is still a loss is that the current capacity utilization is relatively low and is dragged down by inefficient assets.
The company's operation turns to a turning point, and the release of profits depends on economies of scale and inefficient divestiture of assets.
The company's operating conditions are improving, and inefficient assets will continue to be spun off in the future. with the continuous expansion of 4G capacity and the increase of 5G revenue share, scale effect superimposes the new product cycle, Q2 profitability is expected to be greatly improved.
Risk hint: 5G investment construction is not as expected; increased competition in the industry leads to a decline in gross profit margin.
Investment advice: maintain the "overweight" rating.
The company has been the core supplier of Huawei gold medal for many years in a row, and occupies a good share in the filter market in the 4G era. At present, it has made a breakthrough in the share of Ericsson and Nokia filters, and the volume and price of the industry have risen in the 5G era. The company will strengthen its technical reserves such as dielectric waveguide filters, or usher in a good opportunity for development. We estimate that the company's 2019 PE will be 330 million RMB respectively in 2020, taking into account the earmarked funds raised by the company, after deducting nearly 2 billion of the cash market value, the company will maintain an "over-holding" rating corresponding to the 46,000,000 in 2020.
