Overview of events
The company issued a performance forecast on January 18, 2020, and the net profit for 2019 is expected to be 7500-90.81 million yuan, an increase of 36.29% 65.02% over the same period last year.
Analysis and judgment:
The performance is in line with expectations, and the release of new capacity helps to expand the mid-and high-end market.
The company's performance forecast shows that the annual return net profit in 2019 is 7500-90.81 million yuan, which is basically in line with expectations. In 2019, the sales volume of Jiangsu Hongtai light-cured paint business increased significantly, and the ink business maintained steady growth. in addition, Hunan Sunshine and Dongguan Hangsheng began to merge in October 2018 and January 2019, respectively. it is the main factor for the growth of the company's current income and net profit. The company's printing ink has an annual production capacity of 6500 tons, which is now full of production and sales, and the new production capacity of 8000 tons will be gradually released in 2020. The new plant is a semi-automatic digital workshop, the use of three-dimensional production lines and advanced production equipment will greatly improve the company's production capacity and product quality, and can greatly alleviate the current situation of the company's ink business capacity bottleneck. support the company to expand new customers and new product applications. At present, the company has accumulated a number of stable customers with strong comprehensive strength, such as Eaton Electronics and Oulong Electric. In the future, with the release of new ink production capacity, the proportion of high-performance special ink products will increase significantly, which will lay a solid foundation for the company to further accelerate into more medium and high-end customers and products.
Relying on high-quality customers, the paint business is developing rapidly.
In 2017-2019, the revenue share of Q2 company's special paint increased from 37.02% to 58.77%, and it is estimated that the annual revenue of special paint in 2019 will exceed 450 million yuan. With the advantage of technological research and development, Jiangsu Hongtai successfully broke the monopoly of foreign-funded enterprises on high-performance special coatings and became one of the few domestic enterprises with high-performance UV-curable coatings R & D capability and application field expansion strength. In the field of special coatings, Jiangsu Hongtai has maintained a close cooperative relationship with major domestic mobile phone terminal brands such as Huawei, OPPO, Lenovo and so on. In the future, the outer shell of 5G mobile phone will be "demetallized" due to signal problems, and more plate covers will be used, while glass covers will be used in high-end models including 5G high-end models in the future. the company's new product anti-fingerprint nano-protective coating will be the first to benefit. According to the company's announcement on September 24, 19, the company's new product anti-fingerprint nano-protective paint has been supplied in bulk by Lance Technology and applied to Huawei P30 pro, Mate20 pro and other high-end models.
Cut into UV printing iron ink to create a new business growth pole
According to the announcement on December 30, 2019, the company, together with natural person Tang Xiong and natural person Lu Guangjun, established Wuxi Guangyu New Materials Co., Ltd. (in which the company subscribed to 6 million yuan to acquire 60% equity interest in Wuxi Guangyu). The company's main product is UV printing iron ink. UV printing ink series, as a substitute for traditional solvent-based environmental protection products, has the advantages of fast curing speed, strong adhesion, environmental protection, high efficiency and energy saving, including UV printing iron ink, UV printing iron varnish, UV white cotin, UV curing PET hardening solution and other products, mainly used in chemical packaging, food packaging, electronic products protective film and other fields, there will be a huge market prospect in the future. Can become the company's future ink plate business important new application areas and performance growth pole.
Investment suggestion
Based on product prices and market changes, the company's homing net profit forecast for 2019-2021 is reduced by 7%, 8%, 6% to 0.91 yuan, 1.21 yuan and 156 million yuan respectively, and the EPS is 0.47,0.63 and 0.81 yuan respectively. The current stock price is 18.98 yuan, corresponding to 40,30 and 24 times PE respectively. The bottleneck of the production capacity of the company's special ink is eliminated, and the light-curing coating benefits from the increase in the market share of domestic brands of smartphones. It is expected that the volume and price of UV iron printing ink will rise in 2020, and the company will be optimistic about its future development and maintain its "overweight" rating.
Risk hint
The risk that the progress of the new ink production is lower than expected; the risk of a sharp rise in the price of upstream raw materials.