Research Report Summary]
Deep cultivation of precision metal manufacturing, from small and beautiful to large and strong: Corson Technology holds a complete set of precision metal manufacturing services and supporting technical methods such as precision molds, stamping, cutting, die casting, CNC, PVD, anodizing, powder molding, injection molding, etc., and has a rich product line, supply two Apple, Sony, Medtronic, Kehui, SolarCity, IronRidge and other consumer electronics, medical and new energy fields of international well-known pet households. After entering the Apple supply chain, the company's performance growth has entered the fast lane, providing products from a single tablet series to mobile phones, tablets and supporting products, laptops, headphones and other product structural parts. This year, the company cut into the mobile phone box, notebook case and other large products, IPO raised 0.99 billion yuan to break the bottleneck of production capacity, issued convertible bonds to raise 0.61 billion funds, in the original Kunshan base on the basis of the addition of Dongtai and Xinghui new production base, greatly expand the scale of production.
To 5G back cover de-metallization highlights the position of the middle frame, high value volume to open the metal processing incremental market: 5G and wireless charging technology continues to advance, metal chassis signal shielding has become a major bottleneck, smartphone metal is the middle frame non-metallic back cover gradually become the mainstream choice of the market. As the key structural part of the mobile phone, the metal middle frame needs to be fixed, support the display screen without glass back cover, and at the same time, it needs to be densely punched and grooved on both sides to carry the internal structural parts, functional modules, PCB main boards, etc. Stainless steel is favored. Stainless steel processing accuracy is more gentry, processing time is longer, the value of a single machine is higher than the traditional aluminum alloy, for the metal processing market to open up incremental space. Still the current market supply and demand relationship, by the two new materials need to increase the processing time, so that the industrial supply and demand relationship to the supply side of the tilt, for the technical strength and capacity scale advantages of Longyang enterprises have service priority to benefit from the development of the industry.
Medical and new energy is expected to become the company's new performance driving point: the company's medical device precision metal structure accumulated deep, through the ISO13485 medical device quality management system certification and foreign well-known medical device manufacturers of the United States Kehui Group certification. The company to not Ke Hui's cooperation as the main line, in product quality and new product workers Luo research and development to increase efforts to expand, to promote further cooperation of non-pet households. With Medtronic's acquisition of Kehui as an opportunity, the company successfully became a supplier to other Medtronic companies. The company's IPO fund-raising project will add 4.5 million pieces of medical surgical structural parts each year. With the acceleration of the company's new product research and development, the medical device structural parts business will make further breakthroughs. Photovoltaic products with the new energy industry boom ushered in new development.
Investment advice: Our company forecasts earnings per share of $1.07, $2.06 and $2.49 from 2017 to 2019, respectively. The return on net assets is 19.1 per cent, 26.9 per cent and 24.6 per cent, respectively, giving a buy-B recommendation with a six-month target price of $55.6, equivalent to a dynamic price-to-earnings ratio of 51.9, 27.0 and 22.3 times from 2017 to 2019.
Risk Warning: The shipment of new products of major pet households is less than expected, the problem of good rate climbing in the expansion of the company's core products is difficult to solve in time, the speed of the company's capital operation and capacity expansion is not as fast as expected, and the penetration of other pet households in the industrial chain into the metal box in the market competition brings new competition test.
