Zhenhua Technology (000733) Brief Evaluation Report: Business structure continued to optimize and profitability increased significantly

Zhenhua Technology (000733) Brief Evaluation Report: Business structure continued to optimize and profitability increased significantly

I. Overview of the event On April 17, the company released its 2018 annual report, thereby achieving an operating income of 53.

38 ‰, a decrease of 33 per year.

43%; realized net profit attributable to mother 2.

590,000 yuan, an increase of 27 in ten years.


Second, the analysis and judgment focus on the main business, and the profit level has improved significantly. In 2018, the company achieved operating income of 53.

38 ‰, a decrease of 33 per year.

43%, initially due to a substantial decline in revenue from the whole machine business; net profit attributable to mothers2.

590,000 yuan, an increase of 27 in ten years.

17%, in the case of revenue decline, the company’s profitability has increased significantly, due to the optimization of the industrial structure, focusing on the development of advantages and the improvement of quality effects.

Expenses for the company during the current year 18.

93%, 11 before 2017.

84% remarkable growth 7.

09pct, first of all for increasing employee compensation and R & D investment.

Achieved gross profit margin of 25 in 2018.

14%, a significant increase of 10 from 2017.

2pct, the highest gross profit margin level of the company since 2001, finally adjusted the low gross profit margin business scale for the company, and promoted the overall gross profit margin level to increase significantly.

The company’s inventory of electronic components increased significantly by 187 over the previous year.

52%, due to the need for stocking of civilian products, the corresponding increase in inventory.

The gross profit margin of new electronic components has increased, and new energy batteries still need to break through the company’s new electronic component plate as its core business, mainly including inverter capacitors, chip resistors, chip inductors, switches, miniature relays, contactors, and semiconductors.Discrete devices, thick-film hybrid integrated circuits, high-voltage vacuum interrupters, lithium-ion power batteries and other products.

The company’s 武汉夜生活网 resistance-capacitive sensing plate is integrated, and it tries to give play to its advantages under the localization and intelligentization of electronic components.

In 2018, it achieved revenue of 29.

76 ppm, a decrease of 4 per year.

84%, but gross margin level reached 42.

36%, an increase of 8 from 2017.

24%, remarkable results in quality and efficiency.

The subsidiary Zhenhua New Energy is mainly engaged in lithium-ion batteries. The new energy business is a strategic emerging business of the company. The report is expected to exceed 59.43 million yuan.

However, the company’s new energy batteries have passed the scientific and technological achievements appraisal and advanced product review, and provided special equipment for special fields. The business is expected to achieve rapid growth in the future.

武汉夜网论坛 The business structure of the whole machine will be adjusted, and the scale of the whole machine will continue to shrink. The whole machine and system plate mainly include mobile communication terminals, artificial intelligence terminals and processing.

In 2018, the segment achieved revenue of 23.

31 ppm, a decrease of 51 per year.

77%, due to the company’s initiative to expand the size of the compressed communications business; achieved a gross profit margin of 3.

37%, with the gross profit level of core business indicators reduced.

The summary of the report has basically completed the adjustment and transformation from mobile communication terminals to artificial intelligence terminals, new customer relationships and the gradual restructuring of the major regional supplier markets.

In 2019, the company will continue to reduce the scale of the communications business, discard low-margin products, and gather resources to develop advantageous industries.

Zhenhua Group is the only listed company with equity incentives for future development. The company is the sole listing platform for China Zhenhua Group, a subsidiary of China Electronics and Information Industry Group. It changes the company’s transfer of non-main business through capital operation, thereby maintaining stable growth of the company’s performance.

At present, listed companies also have multiple high-quality in vitro assets, including Chengdu Huawei, Zhenhua Scenery, Centec Networks, Tianjin Feiteng, etc. We expect the company’s future asset injections to grow as expected.

On December 1, 2018, the company announced the equity incentive plan, which plans to grant 9.37 million stock options to a total of 417 people, including some directors and senior management personnel.The company’s future performance is tied to the interests of senior management, which will help the company’s long-term development.

Third, investment advice The company’s main business is the stable development of new electronic components. New energy projects are expected to become a growth point of performance. We are optimistic about the company’s long-term development.

Expected company 2019?
In 2021, the EPS will be 0.

58, 0.

71 and 0.

RMB 84, corresponding to PE of 27X, 22X and 19X. Comparable companies average 33X and give a “recommended” rating.

4. Risk Tips 1. Slow profitability of new energy battery projects; 2. Slow progress in asset injection