The MEMS business continued its precarious status in the first quarter, and profits surged. In 2017, the global MEMS foundry revenue rankings, the wholly-owned subsidiary Silex ranked third over TSMC and Sony, and the pure foundry industry continued to maintain second place in the world. Silex continues to maintain its explosive status. MEMS process development and wafer manufacturing operations are in the hands of orders, and production capacity and utilization rate and net margin have all reached the best level in recent years. It is expected that the company’s MEMS contribution profit will exceed 40 million in the first half of the year. Will remain high profitability.
The profitability of navigation and avionics was also better than that of the same period of last year. With the arrival of the military reform, new orders for inertial navigation services were gradually implemented, and avionics maintained a rapid growth this year. It is expected that the navigation and avionics profitability will be better in the second half of the year.
The state will increase the support of the semiconductor industry and the company will be the first to benefit from the MEMS industry. Silex is the world's leading MEMS manufacturing company. It is expected that the National IC Fund will support the company as a MEMS core company and support the company's independent establishment through funds. The domestic production line will absorb Silex's international leading technology and gradually train domestic MEMS engineering, technology and management teams to improve the domestic MEMS industry chain.
Earnings forecast and rating: The estimated net profit for 2018-2020 is 1.51/2.94/4.2 billion yuan. It is expected that the company will complete the issuance in 2018, which corresponds to PE57.1/29.3/20.5 times. It maintains the 'strongly recommended' rating.