Water shares (002886) 2019 third quarterly report comment: the main business maintains stable 5G materials sales growth and profitability continues to improve
Matters: The company issued an announcement: (1) the first three quarters of 2019 to achieve operating income6.
32 trillion, ten years +14.
50%, achieve net profit attributable to mother 0.
23 ‰, at least -3.
Achieve operating income in the third and third quarters2.
430,000 yuan, +34 for ten years.
87%, achieved net profit attributable to mother 0.
0.6 million yuan, +5 for ten years.
(2) Considering the influence of macro policies, market environment, financing cost and financing period, the company stopped issuing convertible bonds.
(3) The company intends to change the amount of funds raised from the initial offering to 7,753.
220,000 yuan was used for the “Headquarters Base Project” and “Payment of 51% of the equity in Deqing Kesai”.
Comment: The main business of modified plastics is at a low point, and sales of 5G materials are growing rapidly.
The growth rate of the automobile and home appliance markets has declined or even crossed. The company has expanded and deepened customer cooperation, and the modified plastics business has maintained a relatively stable sales scale and profitability.
In terms of 5G materials, (1) The company acquired the entire business of Samsung Precision LCP in 2014. It is the only company in the world that can continuously produce 3 types of LCP resin and composite materials, with an existing production capacity of 3000t / a.
In the first half of this year, the company’s connector LCP particle sales performance was dazzling, with a 108% increase in sales.
In addition, the LCP film is the best choice for 5G mobile phone antenna materials. The company’s film-level LCP is breaking through and is expected to achieve import substitution.
(2) PTFE is the best filling material for 5G substrate PCBs, with a space of nearly 13 billion yuan. Deqing Cosai, acquired by the company, has achieved mass production of PTFE films, and the product is currently in the downstream verification stage.
5G pre-commercialization and import substitution are accelerating. As a domestic leader in LCP and PTFE, the company is expected to benefit significantly.
The single-quarter and third-quarter performance decrease was mainly due to the decrease in government subsidies, and we are optimistic about the increase in profitability brought by the company’s increase in LCP and PTFE production capacity.
The company’s single third quarter gross profit was zero.
4.2 billion, +6.
90%, in line with the increase in income.
The net profit attributable to mothers increased by 45.
36% was mainly due to other income of RMB 1 million in the third quarter and RMB 5.73 million in the second quarter. In addition, management and R & D expenses also increased.
The company’s gross profit margin reached 17 in the first three quarters.
36%, an increase of 0 from the same period last year.
49 points, of which the gross profit margin in the third quarter was 17.
12%, an increase of 1 over the same period last year.
18pct, we think it is mainly due to the increase in the proportion of sales of 5G materials.
With the increase of the company’s LCP sales volume, the profit increase of Jiangsu Wote Special Materials, which is the main body of the company’s RCP research and production, has gradually narrowed. This translates into the increase in LCP production load and the volume of PTFE.
The funds raised for the proposed change will be used for the construction 杭州桑拿网 of the headquarters base project to accelerate the industrialization of the company’s R & D reserve.
The headquarters of the company is obtained through leasing. The construction of the headquarters will improve the company’s operating efficiency, integrate and optimize research and development resources, strengthen the innovation strength, and meet future site requirements for growth.
After the project is completed, the company’s materials will make full use of its own property advantages, upgrade the company’s existing academic workstations and engineering technology research center construction standards, and promote the construction of communication and communication materials research and development centers, sensor materials research and development centers, and lightweight materials research and development centers., 南宁桑拿 To promote the transformation of more intellectual resources and improve research and development strength and competitiveness.
Earnings forecasts, estimates and investment ratings.We maintain forecasts that the company’s net profit for the years 19-21 will be 0.
65 ppm, the corresponding EPS is 0.
55 yuan, the current expected corresponding PE is 69/54/44 times; combined with next year’s performance and 60X PE level expectations, adjust the target price to 26.
86 yuan, maintaining the “recommended” level.
Risk reminders: product prices fall sharply; project construction and commissioning fall short of expectations; safety and environmental protection risks.