Dongshan Precision (002384): 1H19 continues high growth and focuses on FPC part and 5G layout
1H19 results are in line with our expectations The company announced 1H19 results: revenue 99.
79 trillion, an annual increase of 38.
4%; Attributable net profit 4.
02 million, an increase of 54 in the half year.
7%, deducting non-net profit 2.
7 ppm, a year-on-year increase of 160%, in line with the United Nations Express, in line with expectations.
Corresponds to the net profit attributable to the mother in the second quarter of 2Q19.
30,000 yuan, an increase of 87 in ten years.
We believe that the high growth in 1H19 is mainly due to the contribution of the circuit board business: 1) MFLX revenue 39.
80,000 yuan, an increase of 47 in ten years.
2%; net profit 2.
5 ppm, a 49-year increase of 49.
0%; 2) Multek mergers and acquisitions completed in the second half of last year and contributed 15 revenue.
30,000 yuan, profit 48.87 million yuan.
MFLX and Multek together contributed 55 in revenue.
1.5 billion, net profit 3.
0ppm, respectively 55 of total revenue and net profit.
3% and 74.
In terms of gross profit margin and expense ratio: 1H19 company’s gross profit margin 14.
9%, 0 in ten years.
04 ppt, mainly because the gross profit margin of the circuit board business increased by 0.
29 ppt to 13.
The three expense ratios are 10.
2, weekly down 0.
49ppt, mainly because the company has revitalized the existing assets through divestiture of assets, sale of equity, lease of idle factories and other forms since last year, and strengthened accounts receivable and inventory management, improved asset turnover, and made the 1H19 management expense ratio and financial expense ratio decrease by 1 respectively.
3ppt / 1.
2ppt to 3.
4% / 3.
At the same time, the company forecasts a 30-50% increase in net profit from January to September, corresponding to a single quarter net profit of 3Q19.
14 ppm, 杭州桑拿 an increase of 15% to 47% in ten years, in line with our expectations.
We believe that the growth is still mainly from the contribution of the circuit board business, especially MFLX.
Development trend FPC business: Apple’s peak season is approaching, and ASP is concerned.
In the third quarter of 19th, we entered the peak season for Apple’s new product stocking. We believe that the company will also continue the ASP trend in the past few years, focus on the increase of material numbers such as MPI antennas in the short term, and increase the share of Japanese and South Korean rivals in the medium and long term. Multi-point layout, welcoming 5G base station / terminal gain.
The company provides communication PCB, metal cavity / dielectric filter, MPI antenna and other capabilities in the 5G field. Customers cover mainstream brands of base stations / terminals. We believe that the company will benefit from base stations / terminals in the context of the acceleration of 5G processes.
7 times price-earnings ratio.
We maintain 19 / 20e EPS 0.
04 yuan forecast, maintain outperform industry rating and 25.
00 yuan target price, corresponding to 19e 29.
The price-earnings ratio is 7 times, compared with the current 44% upside.
Risks The volume of smartphones is down; 5G landing is progressing less than expected.