Torch Electronics (603678) 2019 Semi-annual Report Review: Performance Meets Expectations Self-produced Business Performance Shines New Materials Business Prospects Expectable

Torch Electronics (603678) 2019 Semi-annual Report Review: Performance Meets Expectations Self-produced Business Performance Shines New Materials Business Prospects Expectable

Matters: The company released the semi-annual report for 2019, reporting that the combined company realized total operating income10.

61 ppm, an increase of 12 in ten years.

70%; net profit attributable to mother 2.

13 ppm, an increase of 21 per year.

twenty two%.

Comment: The agency business remained stable, and the self-produced business performed well. Among the company’s main businesses in the first half of 2019, the agency business achieved revenue6.

6.2 billion, a slight increase of 0 previously.

83%, accounting for 62 of operating income.

39%, gross margin 18.

15% twice a year.

The 42 averages remained basically stable; self-produced business realized revenue.

94 million, an increase of 39 every year.

84%, accounting for 37 of operating income.

13%, gross margin 71.

51%, increasing by 0 every year.

With 71 digits, both revenue and profitability have increased significantly and the performance has been outstanding.

Under the four factors of steady increase in national defense budget, accelerated equipment installation, continuous improvement of informatization level, and the strengthening of domestic substitution, the company’s military industry business demand is strong.

The self-produced ceramic capacitor business maintained rapid growth, and the newly expanded business began to contribute to performance growth: the ceramic capacitor business achieved revenue3.

26 ppm, an increase of 31 in ten years.

46%, gross margin of 73.

50%, a year increase of 0.

97 units, with a 深圳桑拿网 significant increase in revenue and an improvement in profitability; in the newly expanded business, the secondary capacitor business achieved revenue of 2385.

850,000 yuan, an increase of 33 in ten years.

45%, gross margin 50.

01%, an increase of 4 a year.

49 monomers; thin-film components achieved revenue of 1461.

780,000 yuan, an increase of 155 every year.

81%, gross margin 70.

25%, around ten years.

54 single; single-layer capacitor business realized revenue of 1619.

650,000 yuan, an increase of 403 every year.

89%, gross margin 61.

72%, more than ten years.

86 units.

New business income has increased significantly, and it has begun to contribute to performance gains, with initial results in expansion.

The preliminary performance of the ceramic new materials business is expected: the company’s ceramic new materials business initially achieved revenue of 1062.

580,000 yuan, an increase of 19 in ten years.

77%, gross margin 73.72%, an increase of 19 per year.

82 units; revenue and profitability improved simultaneously. Taking into account the particularity of the new materials business, gradual revenue and performance contributions can be expected.

Expenses during the period were stable, and sales expenses increased significantly due to the expansion of business scale.

Total company period expenses 1.

4 billion, an increase of 6 every year.

06%, of which 5,118 were sales expenses.

940,000, an increase of 48 every year.

39%, mainly due to the expansion of business scale, corporate employees’ salary increase and brand promotion; financial costs of 1110.

840,000 yuan, down 9 every year.

54%, mainly due to the reduction in Suzhou Leidu loans and the interest payment of large deposit certificates of Liya New Materials; management expenses of 6066.

920,000 yuan, an increase of 17 per year.

96%, mainly due to the increase in the payment of shares in the third phase of the employee shareholding plan and the depreciation and amortization of new assets; research and development expenses.

980,000 yuan, a decline of 46 per year.

92%, which was mainly due to the decrease in the expenditure of the subsidiary Liya New Materials R & D project.

The company’s operation is gradually getting better, and the company’s future development prospects are optimistic. From the semi-annual report, the company’s inventory increases by 60% each year, and the net cash flow from operating activities increases by 86%. The company’s production and operation are getting better.

We believe that the company’s component business has benefited from the continuous release of industry demand, benefited from the development of the company’s new categories, and has a good momentum of development between supply and demand; the ceramic new materials business has also shown a growth trend for six months. Considering the new materials business in the aerospace field,The application space is broad, and the company’s related products are leading internally in terms of consistency and reliability. In the future, the downstream products will gradually be scaled up and the company’s production capacity will be continuously released. The new materials business is expected to become the company’s new performance growth point.

Complete equity incentives are expected to increase employee motivation.

The company released the third phase of the employee stock ownership plan (plan) in February 2019, and plans to transfer the social public shares repurchased by the company to the employee stock ownership plan at a total price of 137.

660,000 shares, accounting for 0% of the company’s total share capital.


The forthcoming employee shareholding plan is the third phase of the employee shareholding plan since its listing in 2015. Unlike the previous two periods, the source of the issued shares is the company’s repurchased social public shares, and it is transferred at zero price in order to improveEmployee motivation and business efficiency.

Earnings forecast and investment rating: We maintain our expectation that the company’s net profit attributable to its parent for 2019-2021 will be 4.

2.1 billion, 5.

26 billion, 6.

5.6 billion, corresponding to 0 EPS.

93 yuan, 1.

16 yuan, 1.

45 yuan.

Taking into account the estimates of comparable companies in the industry and the company’s historical estimates, the company is given 30 times PE in 2019 and maintains a target price of 28.

00 yuan, maintaining the “strong push” level.

Risk warning: agency business gross profit margin reduces risk; military products orders are less than expected; new materials business progress is less than expected.