Comments: Following the establishment of a joint venture company with IT&T, the company continued to drop out of integrated circuit process control inspections to complete the full range of semiconductor testing.
It is expected that the semiconductor device will accelerate its layout and will refine it. In the face of the opportunities for device import substitution in the process of localization of integrated circuits, the company has clearly incorporated the semiconductor device segment into its development strategy. The company has previously established a joint venture with South Korea IT&T CO., LTD. The company is engaged in research and development, production and sales of semiconductor test equipment. The current technology, team and products are in an orderly manner. After setting up the Shanghai subsidiary company to focus on the integrated circuit process control and inspection field, it has completed the all-round layout of semiconductor testing equipment. Driven by multiple factors such as policy support and industrial fund support, downstream fabs are intensively built. The company is expected to replicate the successful path in the display panel field in the semiconductor field and build a precision electronic device.
Based on the core area of the Yangtze River Delta IC, the industry is fully equipped to facilitate the rapid breakthrough of the company's semiconductor business. This subsidiary is located in Shanghai and has natural advantages in industrial support, talent gathering, market demand and other aspects. Shanghai has the best integrated circuits in China. Industry base, the industry chain is well-developed, and the manufacturing sector has an absolute leading edge in the country. SMIC, Huahong, Huali and other domestic-funded wafer fabs have gathered. Subsidiaries will have talent and market opportunities when they land in Shanghai. Natural advantages, helping semiconductors quickly achieve breakthroughs.
The rapid expansion of panel plant construction and construction, and the company's overall solution capability will continue to benefit. The domestic panel makers represented by BOE are rapidly investing in OLED and high-generation panel industries. The demand for testing equipment will remain high in the next few years. As the leading domestic panel inspection leader, the integrated solution of 'light, machine, and electricity' has an outstanding supply capability. It is expected that the Cell and Array processes will continue to increase in volume, which will drive the company's performance to maintain its high growth momentum.
Investment advice: It is estimated that net profit attributable to mothers in 2018-20 will be 2.71, 4.13, and 593 million, up 62%, 53%, and 44%. Corresponding to EPS1.65, 2.52, 3.62 yuan, corresponding to PE42, 27, 19 times. Maintaining strong recommendation Rating.
Risk Warning: The investment in panel makers has slowed down, and the expansion of the semiconductor industry has not reached expectations.