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Torch Electronics (603678): Revenue and Net Profit in the First Half of the Year Keeping Growth, New Material Market Has Great Potential

Torch Electronics (603678): Revenue and Net Profit in the First Half of the Year Keeping Growth, New Material Market Has Great Potential

The self-produced business maintained steady growth, and cash flow increased significantly in ten years.

From January to June 2019, the company realized consolidated total operating income10.

61 ppm, an increase of 12 in ten years.

70%; net profit attributable to shareholders of the parent company2.

1.3 billion yuan.

In 2019, the company’s operating conditions increased steadily in the first half of the year, and its operating income continued to rise. The net profit attributable to shareholders of listed companies increased by 21.

22%, the net profit attributable to shareholders of listed companies instead of non-recurring gains and losses increased by 25.


Due to the significant increase in sales repayments in the first half of 2019, the net cash flow from operating activities in the first half of 2019 increased by more than 86.


In the first half of 2019, the company’s self-produced business continued to improve and maintained steady growth.

Realize sales revenue 3.

9.4 billion yuan, of which sales of military products2.

710,000 yuan, an increase of 49 over the same period in 2018.

59%, sales revenue of civilian products1.

23 ppm, an increase of 19 over the same period last year.


New materials have a good application prospect and great market potential.

The main product of the new materials segment is CASAS-300 high-end special ceramic materials, which are mainly implemented by its subsidiary, Liya New Materials. Liya Chemicals, as its raw material supply base, provides a precursor to high-四川耍耍网performance ceramic materials.

The company ‘s wholly-owned subsidiary, Liya New Materials, is the main body in the implementation of the industrialization of CASAS-300 special ceramic materials. Due to high technical defects, large initial investment, long downstream cycles, etc., leading to serious industry barriers, there are currently a large number of special ceramic materials industriesThere are not many enterprises with technology.

The technology of Liya New Material is the first of its kind in China, and has obtained the “Class III Confidentiality Certificate”, “Weapon Equipment Quality Management System Certification Certificate”, “Weapon Equipment Research and Production License”, and “Equipment Manufacturing Unit Qualification Certificate”.

The future application prospect is strong, and the market potential is large, which is one of the company’s core competitiveness.

The implementation of the three employee stock ownership plans will motivate employees and ensure the company’s development.

In order to attract and retain talents, the company has established and improved talent incentive policies.

The company will repurchase part of the company’s shares for three consecutive years (2018-2020) for the implementation of employee stock ownership plans or equity incentive plans.

In the first half of 2019, the company implemented the third phase of the employee stock ownership plan, improving the benefit-sharing and risk-sharing mechanisms of employees and all shareholders, improving the cohesion of the company, and providing stable protection and strength for the company’s development.

Profit forecast and investment advice.

We expect Torch Electronics to have EPS of 0 to 2021 respectively.

96, 1.

24 and 1.

61 yuan / share.

Consider buying back shares and motivating employees to benefit the company’s development.

Based on the estimates of comparable companies, we give Torch Electronics 23 to 27 times PE estimates for 2019, corresponding to a reasonable value range of 22.

08 yuan to 25.

92 yuan, given a “preliminary market” rating.

risk warning.

The company’s military orders have the risk of serious fluctuations; the company’s new business areas have slow market development risks; the agency business is affected by the internal trade environment.