Jianghuawei (603078): Raw materials growth performance under short-term pressure to increase production capacity disputes come strong growth momentum

The event company released its 2018 annual report on the evening of March 19, 2019, and the company achieved revenue 3 in 2018.

84 ppm, an increase of ten years8.

30%; net profit attributable to mother is 39.92 million yuan, which is extended by 25 per year.

62%; net profit after deducting non-return to mother is 33.04 million yuan, every 29 people.

06%; realized net cash flow from operating activities of 72.88 million yuan, an annual increase of 100.

54%.

The average ROE is expected to be 5% with an increase of 4 units per quarter.

A brief evaluation of the growth rate of raw materials as a result of the growth rate of performance, and the increased growth attributes on construction projects highlight the performance changes in the company ‘s performance, thereby increasing the price of basic chemical raw materials in 2018, squeezing the company ‘s profit margins and reducing its gross profit margin:The company’s comprehensive gross profit margin is 31%, which is increased by 4 units per quarter.

The company’s expense ratio increased slightly during the reporting period, reporting progress sales, management + R & D, and financial expense ratios of 8 respectively.

32%, 11.

93%, -0.

42%, change +1 each year.

11, +0.

63, -0.

72 units.

The gradual increase in gross profit margin and the slight increase in the expense ratio during the period caused the company’s net interest rate to change from 15% to 10%, which is also the leading role of the company’s ROE replacement.

In terms of cash flow, the company’s current net ratio and current revenue ratio are 184% and 85%, respectively. The increase in operating cash flow is a significant increase in account receivables: the company’s accounts payable1 at the end of the reporting period.

09 million yuan, a substantial increase of about 48 million yuan previously.

At the end of the reporting period, the company’s fixed assets increased by 27% to 2.

0.6 million yuan, based on 1.

6Initialization of technical upgrading projects; the construction period increased by 1062% to 1.

4.2 billion, 69% of construction in progress / fixed assets, mainly due to 3.

5 preliminary fundraising projects and 5.

8 The top Zhenjiang project started construction.

Wet electronics chemical leader, endogenous growth momentum continues to be strong The company is the domestic leader in wet electronics chemicals. Its products are mainly used in the flat panel display and semiconductor industries, and the existing wet electronics chemicals capacity.

5 years / year (including 1 period of incremental incremental technical transformation projects that passed environmental protection acceptance in the early stage), the company’s capacity under construction also includes Jiangyin Phase 2 of the IPO project.

5 electrostatic capacity, Zhenjiang Phase I 5.

8 air intake and Sichuan Chengmei 5 air intake, the long-term plan also includes 17 throughput of Zhenjiang Phase II.

The company’s total capacity under construction and long-term planning reached more than 7 times of the existing capacity.

The IPO investment project is expected to start production in 2019.

And Zhenjiang Phase 5.

8 Top and Sichuan Chengmei 5 are expected to have their production capacity completed by the end of 2019, and the company will continue to have an endogenous growth driver.

With the rise of Core Screen and the acceleration of domestic production, the company is expected to take advantage of the current global display panel and semiconductor manufacturing industry is shifting to the internal continent.

According to our statistics, the total LCD panel production capacity at the end of 2017 will be about 86 million square meters, and it will increase 深圳SPA会所 to about 180 million square meters by the end of 2020, with an average annual growth rate of nearly 30%; OLED panel production capacity will rapidly increase from 910,000 square meters at the end of 2017 to the end of 2020.Of about 12 million square meters, with an average annual growth rate of nearly 140%.

The center of global semiconductor manufacturing is shifting to mainland China.

According to a report issued by the International Semiconductor Equipment and Materials Industry Association (SEMI), more than 40% of wafer fabs that will be commissioned between 2017 and 2020 are located in mainland China.

The company’s capacity expansion pace matches the downstream demand growth and promotes the momentum.

In terms of ultra-pure reagents, in the field of flat panel display, the company’s etching solution and other products are on the scale of Xianyang Rainbow and Chengdu Panda; in the field of semiconductors, the company’s products sold in Silan Jixin continued to increase its volume, and the etching solution was successfully introduced into the 12-inch Chongqing WanwanDomestic line.The front-end wafers are toxic, and many of the company’s products have entered the Tianjin production line.

For photoresist supporting reagents, the company maintained stable sales to CLP Panda customers, expanded sales to existing customers such as Tianma Microelectronics, Huaxing Optoelectronics, and actively developed high-generation panel companies such as Xianyang Rainbow and Chengdu Panda.

Increased sales of developer products for customers such as Silan Jixin, Changdian Advanced, and Founder Micro in the semiconductor field.

Upstream raw materials have generally fallen, and the cost side will cater to the improvement of the company’s main raw materials for basic chemical raw materials.

In 2019, the company’s main raw materials are hydrofluoric acid, blends, concentrated nitric acid, hydrogen peroxide, concentrated sulfuric acid, caustic soda, and absolute ethanol. From 2019Q1 to today, the average prices have decreased by 15%, 18%, 23%, 16%, and 1% from 2018Q4.

The decline in the price of raw materials will effectively alleviate the pressure on the company’s cost side and increase the company’s profit.

It is expected that the company’s net profit attributable to the parent in 2019 and 2020 will be 0 respectively.

66, 1.

2.1 billion, corresponding to PE 41X, 22X, maintaining an overweight rating.