Shentianma A (000050): Exceeding expectations for 1H19 smartphone panel pressure


Shentianma A (000050): Exceeding expectations for 1H19 smartphone panel pressure

1H19 net profit was lower than our expectation. Shenzhen Tianma’s 1H19 revenue reached 14.6 billion US dollars, a slight increase of 4% each year; gross profit margin reached 16%, a slight increase of 0 each time.

3 aspects.

Net profit reached US $ 600 million, a year-on-year decrease of 23%, mainly due to the company’s business scale expansion in the first half of the year, recruitment costs, and labor costs leading to a significant increase in management costs.

Net profit after deductions reached 300 million yuan, a 20% drop in excess.

The company’s revenue was in line with our expectations, but due to the increase in expenses during the period, the net profit was lower than our expectations.

Performance, the company’s LTPS production line maintained full production and sales, the world’s market share, the company expects to reach 25% in 2019, but the company’s progress in flexible AMOLED is slightly behind compared to other domestic competitors, maintaining a neutral level.

Development Trend Consumer Electronics: The company’s Xiamen LTPS production line has maintained full production and sales for half a year, and the yield, process technology, and product quality have reached industry-leading levels, and provide customers with a variety of comprehensive screen customization solutions.

The company surpassed JDI in 2018 to become the world’s largest supplier of LTPSLCD smart phone panels, and is expected to reach a market share of 25% in 2019.

However, due to weak smartphone demand, the unit price of 1H19 smartphone LCD panels fell by 0?
13% varies.

The company ‘s Wuhan AMOLED production line already has stable customer resources for hard screens, and flexible screens have begun mass production. However, we believe that the company ‘s layout is behind the internal indicators, and that flexible screens have excess global production capacity, which is not conducive to the company’s business development.

Professional display products: The company’s a-Si production capacity mainly focuses on automotive, industrial control, medical and other special display areas.

We believe that in the long run, 1) vehicle display will benefit from the demand for large-screen, high-definition, multi-screen, and touch-enabled; 2) the rapid development of emerging markets such as the industrial display market, public transportation, charging piles;Medical display market, medical equipment display market scale continues to expand, automation is steady.

Among them, we believe that the automotive industry has the widest space, but there are more demand-side automotive panel penetration growth rates that are abrupt and stable, and new customers and new 南京夜网 products in the automotive industry chain have shortened the cut-in period, and fierce competition in the supply side makes it difficult for related businesses to have explosiveness.increase.

Earnings forecasts and estimates Taking into account that product optimization (Notch, water drop screen) leads to an increase in average unit price, we will increase our revenue by 7% / 7% in 2019/20; taking into account the cost pressure during 2019, we will lower our 2019 net profit forecast18However, we expect the gross profit margin to pick up in 2020 and raise the net profit forecast for 2020 by 20%.

Maintain Neutral rating and raise target price by 53% to 15.

00 yuan (2020, the overall demand for smart phones and other terminal equipment rebounded, while the overseas panel throughput provided a gradual contraction.

7 times up to 1.

0 times), corresponding to 1 in 2020.

0 times P / B.

Risk AMOLED yield and capacity climb higher than market expectations