Carbon Yuan Technology (603133) 2019 Third Quarterly Report Review: Graphite Business Warm Up
The increase in short-term expansion affects profits. In the long term, the ASP of 5G mobile phone cooling components is improved, and the rating of “Buy” is maintained.   The mobile phone sales bottom in Q1 2019, the company’s performance was slightly lower than market expectations.The company released the third quarter report for 2019. The first three quarters / Q3 single quarter operating income was 3 respectively.490,000 yuan (-10% year-on-year.59%) / 1.4.3 billion (44% year-on-year), net profit attributable to mothers was -14.85 million yuan (46.68 million yuan in the same period in 2018) / 98.1 billion yuan (-35 year-on-year).84%), the performance was slightly lower than market expectations.The first are: (1) the volume of smart phones continues to shrink in 2019, and graphite sheet prices are fiercely competitive; (2) the company’s capacity restructuring and mobile migration in the first half of the year, affecting revenue and gross profit margin; (3) mobile phone cooling, carbon yuan photoelectricThe component business is in the R & D investment period and costs have increased.   Q3 improves the recovery, and graphite sheets benefit from 5G, which is expected to resume growth.The company’s Q1 / Q2 / Q3 single quarter revenue was 0.88/1.18/1.430,000 yuan, respectively -19.63% /-20.13% / + 7.44%, the industry’s prosperity in the first half of the year fell, in the third quarter benefited from the listing of new mobile phones and the release of the company’s production capacity, and operating income significantly recovered.Looking forward to the global 5G mobile phone sales in 2020 2?With 300 million units, the demand for heat dissipation has increased, and the accelerated application of thick graphite and multilayer graphite is expected to drive the company’s graphite sheet business to continue to improve.The company’s Q1 / Q2 / Q3 single quarter gross margins were 11 respectively.85% / 14.63% / 24.11% in the third quarter has returned to 2018 levels.   In 5G mobile phones, the heat pipe / soaking plate promotes rapid penetration.The complexity of 5G mobile phones increases, and the amount of overlapping calculations increases. The average increase is about 6W, about 4G + 50%, and the goal can even reach 9?At 10W, the single device value of 5G mobile phone cooling components in a limited space has doubled. We estimate the global value of 209 ppm in 2025, CAGR16.6%.4G mobile phones are mainly cooled by graphite sheets, and 5G mobile phones are expected to become a mainstream solution with superimposed fast average temperature heat pipes / heat equalizing plates. We predict that by 2025, the proportion of heat pipes / heat equalizing plates will be 60% / 20%.In our judgment, mainland Chinese manufacturers benefit from industrial chain aggregation and customized services, and the expansion of advantages is expected to continue to increase.   The company realizes its products, leading the production capacity layout, and realizes the release of elasticity in 2020.The company’s heat pipe / heat equalizing plate products and production capacity are leading in land-based manufacturers, and our estimated throughput is 2kk / month and 1kk / month, respectively.The company’s heat pipe / heat equalizing plate has passed the certification of domestic benchmark manufacturers, the heat pipe is officially supplied, and the heat equalizing plate is climbing.The company focuses on improving the automation level of production lines and consolidating stable delivery capabilities.Taking into account the scale of network construction in 2020 and the 南宁桑拿 expected sales volume of HOVM 5G mobile phones, the company’s heat pipe / heating plate is expected to become a new growth point.   Risk factors: fierce price competition in the graphite sheet industry, and excess capacity of heat pipes / heating plates.   Investment suggestion: The company’s graphite sheet business is picking up. Looking forward to the future, 5G mobile phone cooling demand will increase, which is expected to bring in new products such as heat pipes / heating plates.Considering the continued investment in new products, we cut down on 2019?Net profit forecast for 2021 is zero.30/1.22/2.22 trillion (previous forecast was 0.33/1.40/2.42 ppm, with a range of -9% /-12% /-8%). The EPS forecast for the latest equity is 0.14/0.58/1.The current price is RMB 05, corresponding to 121/29 / 16xPE. It is expected that the 5G volume in 2020 will lead to the realization of results, and maintain the “Buy” rating.