Lixun Precision (002475) Commentary Report: High Performance and Optimistic about the New Ecology of the Company’s Business Model
Event: On April 15, 2019, the company announced its 2018 performance.The company’s operating income in 2018 was 358.50 ppm, a 57-year increase of 57.06%; net profit attributable to mother 27.23 ppm, an increase of 61 in ten years.05%; gross sales margin 21.05%, a year to increase by 1.05pct; net sales margin 7.85%, a year to raise 0.19 points; net cash flow from operating activities.42 trillion, an increase of 1761 in ten years.14%. Comments: The profitability has clearly reversed and strengthened. Consumer electronics, automotive and communications high-speed growth companies continued to have high revenue growth in 2018. The gross profit margin and net sales margin decreased, and the number of employees increased by 43.In 39% of cases, per capita income and per capita profit increased by 9 respectively.55%, 12.30%, profitability significantly reversed and strengthened.In view of different industries, the revenue growth of the consumer electronics, automotive and communications sectors in 2018 was 76.50%, 52.81% and 30.04%.Under the situation that the overall smartphone is saturated, the company’s consumer electronics business performance is still outstanding, indicating that the company’s business expansion around customer A has been substantially smooth.The combined company ‘s net profit attributable to mothers in the first quarter increased by 70% -90%, which is higher than the net profit attributable to mothers in the second quarter of the past three years, indicating that the company ‘s automotive and communications businesses have entered the fast track of growth. The operating capacity has continued to increase, and high R & D investment is optimistic about the company’s new business development. The company’s operating cycle in 2018 was 143.In 64 days, the turnover rate of inventory and accounts receivable was 6, respectively.90, 3.94, which has continued to improve over the past three years, indicating that the company’s operating capabilities have continued to increase.At the same time, the company’s R & D expenditure was 25%.1.5 billion, an annual increase of 63.10%, combined with the company’s high-precision system integration experience and learning ability, we are optimistic about the company’s Airpods and the diversified business development status of SPK / RCV, antennas, wireless charging and so on.In the 5G era, three key technologies such as ultra-dense networking, massive MIMO, and millimeter wave communication are evenly distributed in the mobile phone and substrate-side antenna architecture and material development. We believe that the company currently has a large number of technology reserves to seize this industry opportunity. Efficient mergers and acquisitions to create a positive feedback system of “components → modules → terminals” product model. The company has extensive market segmentation and R & D technical experience in consumer electronics connectors, and gradually uses it as the basis for expanding to other businesses such as connectors, speakers and antennas.With advanced precision system integration experience and learning capabilities, the company first expanded product categories around customers, and then expanded to other major customers at home and abroad.We believe that the company will focus on large customers and use efficient mergers and acquisitions as a means to transform its product model into “components → modules → terminals”. At the same time, it will expand from the consumer electronics side to the communications and automotive side, and gradually form a positive feedback ecosystem.This positive feedback system effectively reduces the company’s operating and technological transformation risks while giving the company room for growth. Profit forecast and estimation: We estimate the company’s operating income for 2019-2021 to be 499/643/7武汉夜网论坛44 trillion, and the net profit attributable to the mother will be 38.63/50.19/60.30,000 yuan, the corresponding EPS is 0.72/0.94/1.12 yuan, the current sustainable corresponding PE for 2018-2020 is 34, 26 and 22 times respectively.And in 18 and 19 years, the company’s new business cut into A customer, we give 35 times PE for 20 years, the corresponding target price is 32.9 yuan, a reasonable estimate of 26.20%, given a “strong recommendation” rating. Risk warning: AirPods sales and C-type penetration are lower than expected, and major customers’ technical solutions change.