Torch Electronics (603678): The growth of military electronics has significantly reduced the losses of new materials many times

Torch Electronics (603678): The growth of military electronics has significantly reduced the losses of new materials many times

The net profit attributable to mothers increased by 21 in 19H1.

22%, the growth in the first half of the performance is in line with expectations The company released the 2019 semi-annual report, the company’s revenue in 2019H110.

61 ppm, an increase of 12 in ten years.

7%, net profit attributable to mother is 2.

13 ppm, an increase of 21 per year.

22%, performance 杭州桑拿 growth in line with expectations.

As the core supplier of military MLCC, the company is actively deploying the two-way capacitor and special ceramic materials business, and its future performance will continue to increase.

We expect the company’s EPS to be zero in 2019-2021.



35 yuan, maintain “Buy” rating.

Military electronics business revenues increase by 49 per year.

6%, self-produced components business continued to improve 2019H1 company’s self-produced business to achieve sales revenue3.

0.94 million yuan, of which sales of military products2.

710,000 yuan, an increase of 49.

59%; self-produced sales revenue of civilian products1.

23 ppm, an increase of 19 per year.


Guangzhou Tianji 2019H1 acquired in April 2018 achieved revenue of 3165.

10,000 yuan, net profit 1214.

60,000 yuan, the first half of the net profit is close to the 2018 consolidated profit.

2019H1 company’s tungsten capacitor business achieved sales revenue of 2385.

90,000 yuan, an increase of 33 in ten years.

45%, gross margin 50.

01%, an increase of 4 a year.

49pct, sales and profits of tungsten capacitors have further increased.

We believe that after the end of the 13th Five-Year Plan and the gradual elimination of the effects of the military reform, the military electronics business is expected to usher in a period of sustained high-speed growth.

The new materials business has reduced losses by nearly half, and it is expected to significantly increase the company’s competitiveness and profitability in the future.

580,000 yuan, an increase of 19 every year.

77%, the three companies engaged in new materials business Liya New Materials, Liya Tetao, Liya Chemical replaced 1.34 million yuan, 1.65 million yuan, 4.84 million yuan, respectively, reducing losses 626 times in total.

270,000 yuan.

The company started to deploy the industrialization of CASAS-300 materials in 2014, and started construction of the industrialization project of CASAS-300 in 2016, and realized profitability in 2018. The business is currently progressing smoothly.

This material is expensive. According to the company’s announced price of about 50,000 to 6 million / kg, the continuous growth of downstream demand in the future and the gradual release of production capacity will significantly enhance the company’s competitiveness and profitability.

The decline in the gross profit margin of the trading business, which is expected to achieve revenue in 2019H1’s trading business6.

62 ppm, an increase of 0 per year.

81%, gross profit margin 18.

15% twice a year.

42 points.In 2018, the company’s trade sector business was affected by the shortage of supplementary agent lines and the ceramic capacitor market. The gross profit margin of trading products increased. In 2019, the shortage of ceramic capacitors eased. The product price and gross profit margin generally began to decrease. We believe that the company’s agencyThe business gross margin growth rate is still within 深圳桑拿网 expectations.

Ceramic capacitors and ceramics new materials high-quality civilian enterprises, maintain the “buy” rating company in the first half of the new material business substantially reduced losses, military electronics business grew significantly, we believe that the transition to new materials and military electronics business usher in a high growth period, 2020The performance of -2021 is expected to continue to grow at a high speed. Therefore, the profit forecast for 2020-2021 is raised. It is estimated that Torch Electronics’ operating income for 2019-2021 will be 24.



7.9 billion (number from 19-21 years ago 24.



5.7 billion), net profit attributable to mothers was 4.



1.3 billion (19-21 years ago) 4.



33 ppm), the corresponding EPS is 0.



35 yuan.

Comparable companies’ average P / E in 2019 is estimated to be 34.

42, we give Torch Electronics 34-34 in 2019.

5x P / E estimates with a target price range of 30.


46 yuan / share.

Maintain “Buy” rating.
Risk reminder: Expenditure on military spending and military-civilian integration policies are expected; the promotion of new materials fails to meet expectations.