Jingwang Electronics (603228): Performance in line with expectations optimistic about the company’s steady growth

Jingwang Electronics (603228): Performance in line with expectations optimistic about the company’s steady growth

Event: The company released the 2019 first quarter report and achieved operating income13.

160,000 yuan, an increase of 33 in ten years.

57%; net profit attributable to mother 1.

84 ppm, an increase of 17 in ten years.

68%.

The upgrading of the existing production line and the release of the second phase of Jiangxi ‘s new production capacity have resulted in a steady increase in company revenue.

The company’s existing production lines in Shenzhen, Longchuan, and Jiangxi were upgraded and expanded to expand production capacity. At the same time, Jiangxi’s second phase of new production capacity was released, resulting in increased operating income.

57%.

Sales expenses increase by 14 per year.

51%, lower than the growth rate of revenue; management expenses increase by 49 per year.

38%, mainly due to budget stock incentive costs, repair costs increased; financial costs increased by 64.

06%, mainly due to the increase in interest expenses on convertible bonds; research and development costs increased by 21 each year.

92%; net cash flows from operating activities increase by 36 per year.

25%, mainly due to the increase in sales scale, continued strengthening of customer repayment management, increased export tax rebates and reduced taxes and fees.

The decline in gross profit in the single quarter was due to the transition period of Zhuhai Seaview.

The company’s gross profit margin for the first quarter of 2019 was 29.

09%, a decrease of 3 per year.

7 averages, down by 0 from the previous month.

15 units.

In December 2018, the company completed the merger and acquisition of 51% of Zhuhai’s win-win (now Jingwang Flexible) 深圳夜生活 equity merger and acquisition in Zhuhai. In 2018, Zhuhai Jingwang Flexible consolidated and replaced about 15 million yuan. The first quarter of 2019 is still in the process of production line optimizationin.

We believe that with the company’s long-term accumulation of excellent management capabilities, it is expected that Jingwang Flexibility will quickly achieve integration and upgrade, and gradually move towards increasing revenue and profit.

The logic of shifting global PCB production capacity to mainland China remains the same, and the growth ceiling of high-quality companies is high enough.

According to Prismark data, the PCB output value of mainland China in 2018 was 327.

US $ 2 billion, and it is expected that China’s PCB output value will grow at a compound rate of 4-20 years from 2018-2023.

4%, leading the world, the trend of global PCB transfer to the mainland continues to deepen.

The company’s revenue in 2018 was 49.

8.6 billion, accounting for only 2% of mainland PCB output value.

2%, as one of the companies with the strongest profitability in the industry and the highest net interest rate level, is still in full growth space.

Investment suggestion: It is expected that the company’s net profit attributable to shareholders of listed companies will be 10 in 2019-2021.

10,000 yuan, 12.

6.6 billion, 16.

41 trillion, corresponding to 2 EPS.

33 yuan, 2.

94 yuan, 3.

81 yuan, the annual growth rate was 24.

6%, 26.

5%, 29.

7%.Focusing on the domestic 5G commercial advancement, the popularization of automotive electronics and other emerging demand in the PCB market, meanwhile it is expected that the company’s new automated production line is expected to achieve higher yields and efficiency. Zhuhai Wangfeng’s profit level will gradually move closer to the company’s FPC business and maintain buying.A’s investment rating has a 6-month target price of 77.

76 yuan.

Risk warning: Macroeconomic fluctuations, intensified competition in the industry, and the start-up of new projects is less than expected.