Jingwang Electronics (603228) 2018 Annual Report Comments: Capacity Landing + M & A Integration 19 Years Marginal Improvement Could Be Expected

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Jingwang Electronics (603228) 2018 Annual Report Comments: Capacity Landing + M & A Integration 19 Years Marginal Improvement Could Be Expected

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Jingwang Electronics (603228) 2018 Annual Report Comments: Capacity Landing + M & A Integration 19 Years Marginal Improvement Could Be Expected

Core Views The company achieved revenue of 49 in 2018.

8.6 billion, +18 a year.

93%; net profit attributable to mother 8.

03 ten percent, +21.

66%; net profit after deduction to mother 7.

51 ppm, +19 a year.

05%.

The company’s downstream customers 武汉夜网论坛 are widely distributed in the fields of communications, consumer electronics, and automobiles, and rely on high-quality products to accumulate rich customer resources.

Looking ahead, the company’s market share is expected to further increase through the release of production capacity and the development of new customers.

2018 performance growth + 22%, RPCB, FPC, MPCB go hand in hand.

The company achieved revenue of 49 in 2018.

8.6 billion, +18 per year.

93%; net profit attributable to mother 8.

03 ten percent, +21.

66%; net profit after deduction to mother 7.

5.1 billion, +19 a year.

05%.

As far as the situation in a single quarter is concerned, the company achieved revenue of 13 in Q4.

44 trillion, ten years +21.

28%, net profit attributable to mother 1.

74 ppm, +21 for ten years.

48%.

In 2018, the company’s net profit increased slightly with higher revenue. Benefiting from Jiangxi Jingwang’s certification of emerging companies, the company’s actual yield decreased by 3pcs to 13.

7%.

In terms of business, 60% of RPCB revenues + 21%; 30% of FPC revenues + 14%, and 9% of MPCBs have the fastest growth due to low bases, at least + 25%.

Looking ahead to 2019, we are optimistic that the company’s capacity release will drive continued growth.

Costs and period expenses increased slightly.

Gross profit margin for 2018 was 31.

78% every year -0.

73pct, even if the FPC yield is increased by 3pcts, but due to the increase in raw material and labor costs, the gross profit margin slightly decreases.

In addition, company period expenses are 12.

8% +0 per year.

1pct, keep stable, in which the management expense rate is double +0.

66 points to 4.

8%, mainly due to the increase in incentives for employees, social security and share-based payment expenses; financial expense ratio benefited from increased exchange loss gains, and -0.

57pct to -0.

2%.

The company has multiple projects in parallel, and high-quality production capacity is accelerating.According to industry research, the company’s production capacity in 2017 includes 3.3 million square meters of RPCB + 750,000 square meters of FPC + 310,000 square meters of MPCB.

In 2018, the company is optimistic about the downstream needs of 5G, automotive electronics, etc., and accelerated the expansion of capacity in multiple projects in parallel: 1) The Zhuhai project completed the environmental impact assessment approval in April 2018 and will be constructed in three phases. After completion, 2 million square meters of FPC and 300 10,000 square meters of HDI production capacity.

2) The first phase of Jingwang Jiangxi project reached its production capacity in March, adding 1.2 million square meters of RPCB and 180,000 square meters of HDI board capacity.

In addition, the company issued the second phase of the convertible bond construction project, which will add 2.4 million square meters of RPCB annual capacity after it reaches capacity, and use its own funds to construct it in advance.
Q3 has one production line each.

It is expected that the company will increase its annual production capacity by nearly 9 million square meters after the completion of all projects.

Optimistic about the company’s production capacity to maintain 20 annually?
The steady growth of 30% has injected strong momentum into revenue growth.

Acquired a 51% stake in Zhuhai, a well-established FPC company, and a win-win situation with Luxion Precision.

In September 2018, the company took 2.

900 million acquisition of a 51% stake in Zhuhai, a win-win situation held by Luxun Precision, has been completed at the end of 2018 and has been renamed Zhuhai Wangwang.

The company’s FPC business customers have strong demand. After the merger and acquisition of Zhuhai Seaview, the problem of insufficient production capacity can be quickly alleviated. At the same time, the variety of FPC products can be enriched to enhance the company’s product competitiveness.

In 2018, Zhuhaijingwang’s consolidated net profit was 15.26 million yuan, which is still in the transition state. It is expected that the company’s “management model + high-quality orders” will be introduced, and Zhuhaijingwang is expected to quickly turn losses into profit.

In addition, the acquisition also opens the company’s strategic cooperation with Luxion Precision, and jointly concludes complementary advantages, resource sharing, and opens up wider development space.

Risk factors.

The new production capacity fell short of expectations, and the market competition in the PCB field intensified.

Profit forecast and estimation.

The company is one of the few domestic manufacturers covering both RPCB, FPC and MPCB.

The company focuses on smart manufacturing upgrades, and continues to expand and expand its production capacity in high-end products.

Based on the annual report data, we adjusted the company’s EPS forecast for 2019/20 to 2.

63/3.

40 yuan (the original forecast was 2).

80/3.

56 yuan), plus a forecast of 4 in 2021.

19 yuan, giving 30 times PE in 2019, corresponding to a target price of 78.

9 yuan, maintain “Buy” rating.