Tiantong Co., Ltd. (600330): Electronic materials steadily hit the potential of high-end equipment

Tiantong Co., Ltd. (600330): Electronic materials steadily hit the potential of high-end equipment

Event: 2019Q1 returns to net profit of mother 0.

8.3 billion, in line with expectations The company released the 2019 quarterly report, and achieved revenue 5 in the reporting period.

34 trillion, a decrease of 9 a year.

70%; net profit attributable to mother 0.

83 ppm, an increase of 0 per year.

69%, deducting non-attributed net profit of 0.

41 trillion, a decrease of 43 a year.

12%, an increase of 10 compared with 2018Q4.

81%, in line with expectations.

The decrease in revenue was mainly affected by the sluggish downstream demand for materials; the gross profit margin fell in the first quarter of 2019 and increased by 1.

74pct, the reduction in the expense ratio during the sale is reduced by 2.

94 points.

We are optimistic about the company’s collaborative industrial layout and project execution capabilities in electronic materials and high-end equipment, especially the breakthrough in the equipment business in recent years.

EPS are expected to be 0 in 19-21.

37/0/46/0.

54 yuan, maintain “overweight” rating.

Electronic materials: LED substrate demand is declining, magnetic material customer structure continues to increase, and revenue in 19Q1 is decreasing. We believe that this is mainly due to the sluggish downstream demand for materials.

In 2018, the company’s sapphire revenue increased by 55% annually, mainly due to the increase in production capacity and sales volume; but from the end of 17 to the 南京夜网 present, sapphire downstream LED chips have continued to reduce prices.At the end of the year; the 18-year report shows that in the future, the company will increase the promotion of more crystal materials in the application of window materials such as high-end watches, mobile terminal panels, and camera protection films, gradually reducing the impact of demand.

In 18 years, the revenue of magnetic materials business increased by 6%, and the downstream of magnetic materials was relatively dispersed. We believe that the company’s long-term accumulation in new applications such as wireless charging, electric vehicles, NFC, etc., is expected to resist the downward impact of some traditional magnetic materials demand in 19 years.

Photovoltaic single crystal furnace: In 19 years, industry demand resumed leading production expansion, and crystal equipment has obvious advantages. The “13th Five-Year Plan” for power development pointed out that by the end of 2020, solar power generation capacity should reach 105GW or more, that is, the PV installation CAGR during the “13th Five-year Plan”For 19

4%.

The “Thirteenth Five-Year Plan” for solar energy development proposes that by 2020, the price of photovoltaic power generation will drop by more than 50% on the basis of 2015, and the parity on-grid target will be achieved on the electricity consumption side.

After the impact of the 18-year photovoltaic new policy, the industry recovered in 19 years, and demand resumed growth. Some leading companies began to expand production capacity, and the industry boom gradually replaced the upstream photovoltaic equipment.

Due to its efficiency advantages and the industrialization of PERC technology, monocrystalline products have promoted rapid market penetration.

Tiantong’s long-term integration of crystal growth processes and equipment has obvious advantages in photovoltaic single crystal furnaces and helps to benefit from this downstream expansion cycle.

Display equipment: The development of OLED module segment binding equipment is completed, and it is practical for domestic OLED construction. CCID data shows that 12-18 China’s flat display market continues to grow, with large-sized LCDs and small and medium-sized OLEDs becoming the main growth points, 19-OLED is expected to usher in a peak investment in 20 years.

As one of the first units to start localization of display equipment, Tiantong provides major inspection panel manufacturers with photo inspection and transportation supporting equipment for various generations of production lines, which are widely used in display fields such as TFT-LCD and OLED.

The 18-year report shows that the company’s OLED module segment binding equipment has completed technology and product development, pending customer verification.

We are optimistic about the company’s business layout and maintain an “overweight” rating. We maintain our long-term forecast and expect revenue from 19-21 to 32.

67/36.

49/40.

7.2 billion, net profit attributable to mother 3.

68/4.

61/5.

3.3 billion.

The average PE value of the target company’s 2019Wind consensus is 29X, and we give 28-30XPE based on the net profit attributable to the mother for 19 years, with a target price of 10.
.

36-11.

10 yuan.We are optimistic about the company’s industrial layout and execution capabilities, and maintain the “overweight” rating.

Risk warning: sapphire demand growth rate spreads; semiconductors show that customer testing is less than expected.