Tony Electronics (603595): Performance exceeded expectations and downgrade to Neutral

Tony Electronics (603595): Performance exceeded expectations and downgrade to “Neutral”

2018 performance expectations The company’s 2018 annual report is expected to achieve operating income in 20188.

7.2 billion (+ 20%), achieving net profit1.

1.5 billion (-33%), deducting non-net profit of 0.

3.8 billion (-77%), corresponding to 0 EPS.

81 yuan, lower than expected results.

The main indicator of the company’s performance growth is the diamond wire. The decline in profits is mainly due to the decline in the unit price and gross profit margin of the diamond wire product after the 531 New Deal in the photovoltaic industry.

We believe that the company ‘s 18-year diamond wire price has continued to decline, and the average value of expansion and capacity maximization exceeded expectations. It is expected that the 19-year diamond wire price and gross profit margin will maintain the status quo, and more wireless charging magnetic materials are expected to become new growth points of performance.

The company’s 19PE assessment was 51 times, significantly higher than comparable companies, and its rating was downgraded to “Neutral”.

The company’s King Kong line revenue share continued to increase to 59% in 2018. The company’s King Kong line revenue share continued to increase to 59% in 2018.

1.6 billion, accounting for 59% of total revenue, an increase of 10 over 2017.

11 points.

Benefiting from the increase in productivity of fundraising projects, the King Kong line business is the company’s main revenue growth point. In 2018, the growth volume reached 4.21 million kilometers, with an average price of 122 yuan / km, a decrease of 24 from the average price of 162 yuan / km in 2017.


Laminated wire, conductor, and wireless charging coil products have achieved zero sales revenue.

4.3 billion, 2.

4 billion and 0.

1.6 billion, a decrease of 9 from 2017.

40%, 13.

79%, 22.

06%, lower than expected.

The comprehensive gross profit margin decreased by 13 year-on-year.

50pct, the expense ratio increased 南京夜网论坛 significantly The company’s overall gross profit margin was 27.

96%, a decline of 13 per year.

50pct, net interest rate is 13.

23%, a decline of 10 per year.

64pct, of which the gross profit rate of diamond wire, ultra-fine conductor, laminated wire, and wireless induction coil decreased by 22, respectively.

67, 3.


53, 15.

49 points.

Diamond line gross margin dropped by 22.

67pct mainly comes from falling prices and rising manufacturing costs (+482.


The company’s sales expenses increased by 82 in 2018.

04% (increase in freight and business expenses); management costs increase by 100 per year.

29% (wage growth, equity incentives, and depreciation of the IPO plant); R & D expenses continue to increase 104.

4% (investment in research and development of new products).

Net operating cash flow was 1.91 ppm (+ 732%), mainly due to a decrease in accounts receivable and bills receivable, a decrease in prepaid accounts (purchasing of raw materials), and corporate quotes returned by the new tax law policy

Raised funds for wireless charging magnetic materials, the company is expected to find new performance growth points According to the company ‘s announcement on February 21, 2019, the global wireless charging market size has changed from US $ 1.7 billion in 2015 to US $ 15 billion in 2024.The growth rate is 27%.

The company raised 500 million US dollars in budget to produce 300 million pieces of wireless charging materials and devices annually. After the project reaches full capacity, it will realize an annual income of 17.

95 ppm, total profit1.

800 million.

With the popularity of wireless charging products and the company’s products put into production, the company is expected to find new points of performance growth.

By 2018, the capacity utilization rate and gross profit margin of the King Kong line, we lowered our profit forecast, and we expect the company’s operating income in 19-21 to be 10.



690,000 yuan, net profit attributed to mother 1.



20 trillion, the corresponding EPS is 0.



54 yuan, comparable to the company’s 2019 average PE of 18 times, the company’s 19PE valuation of 51 times, significantly higher, downgrade to “neutral”.

Risk reminder: the risk of high customer concentration; the oversupply of the Diamond Line in 19 years, leading to a reduction in volume risks; the risk of continued increase in labor costs of raw materials; the failure of the new product market to expand smoothly; the risk of new product capacity and yields not meeting expectations.