Yutong Technology: Leader of business package, rapid growth in the advent of the 5G era

2020/01/03 14:02:43 Source: Northeast Securities 2020/01/03 14:02:43

Report summary:

Based on consumer electronics packaging, multi-category cultivation is smooth. Yutong Technology It is currently the largest commercial packaging company in China. It has grasped the high-growth and high-profit dividends of the consumer electronics industry in its early development. With deep competitive advantages, it has continued to deepen cooperation with large customers, achieve rapid growth and form a demonstration effect, and realize business development and deepening of the moat. Virtuous circle. Subsequently, it continued to explore new customers. In 2018, the company's top five customers accounted for only 41% of sales, and the decline in customer concentration reduced operating risks. In recent years, the company has cut into cigarette labels, daily chemical packages and other industries through outbound mergers and acquisitions, and has vigorously developed the wine package business. The current success of multi-category cultivation is expected to become a new growth point for the company's future revenue.

The core competitiveness is strong, and it is a leader in the field of segmentation. The company's core competitiveness is strong: 1. Strong manufacturing capacity; 2. Excellent research and development capabilities; 3. Excellent service capabilities. Strong production capacity helps the company to provide a more timely response and enhance service capabilities; outstanding R & D capabilities help the company to impress customers with product design proofs in tendering and bidding, and to further improve production efficiency. These three capabilities complement each other and jointly build the company's strong core competitiveness, which is the basis for the company to become a comprehensive packaging solution service provider.

Yunchuang's revenue increased rapidly, and the layout of the high-margin long-tail market is worth looking forward to. Yunchuang was established in 2015. It specializes in commercial printing and independently developed Yunchuang Heku DIY software. It has developed unique functions such as online ordering platforms, online editor platforms, featured material libraries, ERP systems, and file cloud storage. Customers can Design directly through the free system of the official website and place an order directly. With the rapid growth of revenue, Yunchuang's profitability has also rebounded rapidly. The net profit margin increased from -10.10% in 2017 to 1.72% in 2018, driving the ROE level to increase from -43.04% in 2017 to 15.22 in 2018. %, At a high level. Yunchuang is committed to serving the high-margin long-tail market and is expected to become the main driver of future revenue growth.

Profit forecast and valuation: Benefiting from the volume of 5G equipment next year, we raise the company's performance forecast. It is expected that the company's EPS in 19-21 will be 1.25, 1.53, and 1.84 yuan, corresponding to the current PE of 21X, 18X, 15X. Maintain “Buy” rating.

Risk Warning: Raw material prices skyrocket, orders fall short of expectations

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