Torch Electronics (603678) annual report comment: rapid growth in performance optimistic about the growth space of new materials business
The company’s performance in the first quarter of 2019 continued to grow rapidly. The company released its 2018 annual report and 2019 first quarter report on April 26, and achieved revenue of 20 in 2018.
24 ppm (+7 throughout the year.
21%), achieving net profit attributable to mother 3.
3.3 billion (+ 40.
71%); revenue in the first quarter of 20194.
64 ppm (+23 throughout the year.
53%), achieving net profit attributable to mother 0.
7.2 billion (+31.
13%); performance continued to grow rapidly.
The self-produced MLCC business grew steadily, and the new material business realized a turnaround in 2018. In terms of business, in the company’s component segment, ceramic capacitor revenue increased 21% and gross profit margin 72.
58%, a decline of 0 every year.
53pct; Tungsten capacitor revenue increased by more than 54%, and gross profit margin 杭州桑拿网 increased by 7.
91pct; Acquired 60% equity of Tianji Electronics and increased single-layer ceramic and thin-film circuit products. After consolidation in May, it realized revenue of 34.6 million yuan and net profit of 12.82 million yuan.
In the new material segment, the strategic layout has shown initial benefits, with an order income of 25.68 million yuan and a project income of 34.31 million yuan.
Due to the continuous shortage of products in the agency business, revenue decreased by more than 3.
16%, but gross margin increased by 8 per second.
Expansion of business scale brings the same period of expenses. The company’s period of expense and revenue increase in the same direction. Affected by the expansion of the business scale, the company’s sales expenses and management expenses increased by 47% and 21% in 2018 and 46 in the first quarter of 2019.%, 19%; financial costs are mainly due to increased bank borrowings, bills of exchange, and other interest costs, which increased by 135% and 13% in Q1 in 2018 and 2019 respectively; in the R & D field, the company maintained R & D intensity, and the R & D costs were basically flat in 2018In Q1 2019, due to the temporary slowdown in R & D expansion, it has been reduced by 54% on many occasions.
The new material business has achieved mass production, and the scale of the future growth space report is optimistic. Liya New Material has obtained military wage quality, scientific research capabilities, production capabilities, and technical levels that have met military equipment procurement standards.
The company’s high-performance ceramic materials have built three production lines to achieve mass production.
High-performance ceramic materials are ideal materials for high-temperature components of aeroengines with large thrust-to-weight ratios. They are mainly used for hot-end components such as nozzles, combustion chamber flame tubes, and low-pressure turbine stator blades.
Special ceramic materials have high technical content and strong profitability. The transformation of Liya New Materials related products will increase the production load, and special ceramic materials will become a new driving force for the company’s growth.
Investment advice and profit forecast The company’s self-operated MLCC business is expected to benefit from the full release of defense orders in the second half of the “Thirteenth Five-Year Plan” period. The new materials business has achieved mass production. It is estimated that the net profit attributable to mothers will be 4 in 19-21.
44 ppm, corresponding to current sustainable PE of 20/15/12 times respectively, comparable company’s average evaluation in 2019 is 28xPE, the company’s new material business is only abroad in Japan, and a few American companies can carry out industrial production, reachingIn order to meet the domestic blank and reduce the demand, considering the particularity of the business, the company can be given 30xPE for 19 years, corresponding to a reasonable value of 29.
1 yuan / share, maintain “Buy” rating.
Risks indicate that the progress of the production load of special ceramic materials is less than expected; the price increase of MLCC materials is less sustainable than expected.