Huagong Technology (000988): Two-wheel drive helps the company to meet 5G development opportunities
The two-wheel drive helps the company to meet the 5G development opportunity. The optical communication business and laser equipment business are the “two wheels” that drive the company’s growth. The construction of 5G networks and the expansion of 5G mobile phones promote the prosperity of the telecommunications optical modules and laser processing equipment.The merger of the leading domestic optical module and laser equipment manufacturers will share the industry’s growth dividend, and another convenience. The integration of the industrial chain is designed to consolidate the company’s competitive advantage and drive participation and improvement.
We are optimistic about the company’s development potential in the 5G era. Is the company expected to be 19?
The 21-year EPS is 0.
51/0.
69/0.
80 yuan.
Comparable companies have an estimated PE average of 35 in 2020.
4x, giving the 2020 PE estimated interval of 35?
36x, corresponding to a target price of 24.
15?
twenty four.
84 yuan, the first coverage given a “buy” rating.
The company is the leader in the application of domestic laser technology. The company is the leader in the application of laser technology.Laser equipment is the two main business pillars.
The company’s historical performance has grown steadily, 15?
The compound growth rate of revenue and net profit for 18 years was 22 respectively.
12% and 13.
93%.
With 5G commercial soon, the company is expected to usher in a good development opportunity relying on the prospective layout of 5G-related products and sales channels.
Optical communications business: Time, geography, people and help start a new 5G journey Time: Lightcounting is expected to 2020?
The compound growth rate of the optical module market for global wireless 杭州桑拿 base station applications will reach 41 in 2022.
80%.
Existing and will start 5G scale construction in 2020 and promote the prosperity of the domestic telecommunications optical module market.
Geographical position: As one of Wuhan’s local leading optical communications companies, the company is expected to give play to its advantages in the industry and benefit from supply chain control, manufacturing, and talent recruitment.
Renhe: The company is one of the few domestic companies with complete chip-to-module integration capabilities in the field of optical communications, which makes the company have breakthrough advantages in product quality, customer responsiveness, and cost control, and has won Huawei’s 2019 gold medalSupplier title.
With regard to new 5G products, the company has a wide range of products and 淡水桑拿网 its capacity expansion continues to advance.
Time, place and people and start a new journey of business development.
Laser equipment business: 5G helps the industry boom, and the integrated layout builds development. The moat company is one of the domestic laser equipment leaders. The related business has ushered in two major development prospects, of which the growth in the number of 5G mobile phones will drive the boom in the laser processing equipment sector;The subsidence, technological excellence, and cost reduction brought about by localization help laser equipment continue to penetrate other industries. Intelligent manufacturing and new energy vehicles will bring new opportunities to the industry.
The company has realized the integration of the industrial chain in the field of laser equipment, and its products cover different products such as high, medium and low power. It is expected to usher in a growth trend driven by the rebound of the boom.
Investment suggestion Two-wheel drive helps the company to meet the 5G development opportunity. We expect the company 19?
The 21-year EPS is 0.
51/0.
69/0.
80 yuan.
Comparable companies have an estimated PE average of 35 in 2020.
4x, giving the estimated PE range of 35 in 2020?
36x, corresponding to a target price of 24.
15?twenty four.
84 yuan, the first coverage given a “buy” rating.
Risk warning: The downstream demand of the laser equipment business is lower than expected, the competition in the telecommunications optical module market is intensified, and the operating expenses exceed expectations.