Sunlord Electronics (002138): Performance meets expectations Expected rebound in second half

Sunlord Electronics (002138): Performance meets expectations Expected rebound in second half
Event: The company released its semi-annual report for 2019 and achieved operating income of approximately 12 in 19H1.17 ppm, a ten-year increase of 7.77%; net profit attributable to mother is about 1.95 ppm, a decrease of 13 per year.80%; net profit after deduction is about 1.8.2 billion, down 4 each year.95%.  Opinion: The performance is in line with expectations, and the performance in the second half of the year is expected to rebound. The company’s 19H1 revenue will grow even longer at 7.77%, basically in line with expectations, of which 5G-related communications business and automotive electronics business maintained high growth.Considering the high base brought by the price increase of the 18Q2 passive component industry, we believe that the company’s actual operating situation in 19Q2 is still better.The company’s gross profit margin in 19Q2 was 35.65%, basically unchanged for a year, an increase of 0 from the previous month.87pct, profitability increased steadily.R & D expenses in the first half of the year 6.92%, increase by 1 every year.56pct, the company is currently in continuous research and development in automotive electronics, filters, magnetic materials, sensors, high-end precision inductors, precision ceramics and other fields; the company’s financial expenses in the first half of the year, of which exchange losses reached 664.190 thousand yuan, in the first half of 2018 it was 535 exchange gains.At the same time, the interest expense on loans increased by 455 over the same period in 2018.430,000 yuan.  In addition, the company generated a one-time distribution income of 25.5 million yuan in the first half of 2018, but no such income in 2019, which is also an important reason for the negative growth of the company’s Q2 performance.  The company’s long-term equity investment increased by 72 in the first half of the year.17%, mainly due to the company’s participation in Shenzhen Baoteng Sunlord Ventures (Limited Partnership), which will focus on investing in companies in related industry chains; the company’s intangible assets increased by 68 in the first half of the year.01%, mainly due to the company’s acquisition of land use rights for the Shanghai base; the company’s repeated short-term and long-term average increases in the first half of the year, mainly due to the company’s daily operating needs increased.  Overall, we believe that the company’s first half of the year is in the stage of future expansion, leading to short-term internal R & D expansion. At the same time, exchange losses and investment gains have also weighed on the company’s first half performance.Judging from the actual operating conditions, the company’s performance in the first half of the year is in a stable and good trend.Looking forward to the second half of the year, we believe that the high base effect is expected to improve, and the restructuring company’s business in communications and automotive is making good progress, which is expected to drive the company’s performance to rebound significantly in the second half of the year.  Inductor main customers are high quality, 5G: Application of new space Inductor is the main business of Sunlord Electronics. In addition, the company ranks in the forefront of the industry in terms of market share, and its technology has reached the domestic leading level. The small size 0201 has become the company’s main product model, The most advanced 01005 products have also achieved mass production.  In 2018, the company made important progress among major domestic mobile phone brand customers and newly entered the supply chain of listed manufacturers.According to industry practice, there will be more sharing among manufacturers entering the supply chain in the initial stage, but if they perform well in subsequent cooperation, it is expected to steadily increase their share.The company has a long-term accumulation in the field of inductance, product quality and supply capacity to maintain first-class, has been a long-term partner of top manufacturers such as Huawei.With a consistently excellent supply capacity, we expect the company to usher in further enhancement of sharing in 2019, driving the continued healthy development of the main industry.  2019 is the first year of 5G commercial use, and large-scale base station construction will begin in the second half of 2019.Due to the continuous increase of communication coaxial, the demand for filtering will increase, and the inductance will also increase greatly.In fact, the applicable space in mobile terminals such as mobile phones is getting smaller and smaller, and the requirements for miniaturization of inductors are getting higher and higher. We expect that the latest 01005 inductors will promote the transmission of 5G expansion and rapid penetration, which will bring the average unit price of inductors.Promotion.The 01005 inductor is manufactured using a photolithography process, which is very different from the existing process, and the technical barriers have been greatly increased, which will ensure that manufacturers who master this process can obtain better profitability.  The rapid volume of automotive electronics has become a performance growth. In the field of automotive electronics, the new power company can simultaneously provide a variety of components 杭州桑拿 such as common-mode lead current transformers for vehicles, power inductors, transformers, wireless charging coils, antennas and protection devices.In order to achieve synergy, it is currently in a period of rapid volume.  The company’s automotive electronics business revenue in the first half of the year increased by 429.97%, to achieve stable supply in large quantities.At present, the company’s automotive electronics has been an important supplier for BOSCH, VALEO, Denso, Tesla, CATL, Koboda and other manufacturers, of which CATL and Koboda are the company’s second major customers in the second quarter of 2019.At present, the company’s reversing radar transformer has achieved 100 million zero defects on the line, becoming some benchmark; BMS transformers for electric vehicles have solved EMC problems in the displacement industry for many years and reduced costs; the performance of the third-generation power inductors has surpassed existing products, The technical strength has reached a whole new level.  Automotive electronic transformers are the main products of the company’s automotive electronics.In 2013 and 2016, the company decided to increase and increase the capacity of electronic transformers twice, and the two additional capacities were 40 million units / year and 2 respectively.5.4 billion per year.Due to the rapid increase in penetration of electric and hybrid vehicles, the demand for electronic transformers is increasing, and the industry space is growing rapidly.The company’s electronic transformers focus on developing automotive applications and are expected to benefit from the rapid development of the industry and help the company’s rapid growth in the future.  Profit forecast, forecasting and rating companies are the leading manufacturers in the field of chip inductors. The capacity of inductors is maintained at a high level, and the capacity will continue to increase and expand in the future.At the same time, the company actively explores new products such as electronic transformers, wireless charging, ceramic back covers, microwave devices, and PCBs. These new products have broad market prospects and are expected to help the company’s rapid growth in the future.We maintain the company’s EPS for 2019-2021 to be 0.66/0.81/1.00 yuan, maintain “Buy” rating.  Risk Warning: The downstream demand of the inductor is lower than expected; the downstream demand of the new product is lower than expected; the new product technology research and development and market expansion are lower than expected.