The business scale of panel testing equipment continued to expand, and the performance growth exceeded expectations: 2018H1 achieved a net profit of 110 million to 125 million, a year-on-year increase of 109.72%-138.32%, of which non-recurring profit and loss affected about 8 million, and the performance growth exceeded expectations. The company has vertical integration capabilities in the flat panel display field of “light, machine, electricity, computing, and software” as well as a good customer base for the market, seizing the opportunities for downstream panel investment growth and expanding the business scale.
The investment in domestic panels continues to increase, and the company has benefited significantly as a leader in equipment: the company's customers cover major domestic panels, module manufacturers such as BOE, Huaxing Optoelectronics, Konka, Foxconn, AUO, Ruiyi Optoelectronics, etc., and products have covered the detection system of the Module process. , And has achieved the scale of sales of Cell manufacturing products, Array process products have also been completed and partially realized sales. Currently the LCD high generation new production line investment is still continuing, OLED and other new technology applications are also accelerating, the company as an industry A small number of companies that can provide three major process inspection systems will benefit significantly.
Accelerate the layout of semiconductor testing and inspection areas and open up the company's growth potential: In January 2018, a subsidiary company established through a joint venture with South Korea’s IT&T Corporation was engaged in the research and development of semiconductor test equipment. Currently, related technologies and business teams are in the process of establishing and expanding, and technical product certification is already in progress. Simultaneous promotion. In June 2018, the company established a wholly-owned subsidiary in Shanghai, Shanghai Precision Microelectronics Equipment Co., Ltd., mainly engaged in semiconductor testing, R&D of process equipment, production and sales, of which the production of integrated circuit process control testing equipment is The company has accelerated its layout in the field of semiconductor testing and inspection. Combined with its strong technical integration capabilities and mature market experience in the display panel field, the company is expected to rapidly break through this area and open up the company's growth space.
Earnings Forecast and Investment Proposal: We expect the company's net profit in 2018-2020 to be 267 million, 445 million and 676 million respectively, corresponding to PE of 44 times, 26 times and 17 times respectively, maintaining the 'buy' rating.
Risk warning: investment in display panel industry slows down, semiconductor industry progress is less than expected