Zhenhua Technology (000733) In-Depth Research Report: Focusing on the main business has a significant effect, the old state-owned enterprises have a new year

Zhenhua Technology (000733) In-Depth Research Report: Focusing on the main business has a significant effect, the old state-owned enterprises have a new year

Key enterprises in military electronic components have focused on the main business and achieved remarkable results.

The company is a military industrial enterprise affiliated to China Electronics and Information Industry Group. It has a broad layout in the field of military electronic components. In May 2019, it replaced the whole machine and parts business. The layout of new electronic component business began to expand.Lifting, the future profitability promoted.

The three factors are superimposed, and the demand for military components and components remains high.

We believe that the defense budget is steadily increasing and the structure is constantly tilting towards equipment. The military is accelerating the transition to informatization. The increasing trend of domestic substitution of military electronic components has been altered. The demand for military components has maintained a high level of prosperity.

The company has been in the field of military electronic components for more than 50 years. Its products cover passive components such as resistance, tolerance, and sense, as well as semiconductor devices such as diodes, transistors, IGBTs, transistors, etc., and have built strong technical barriers and brand barriers. There are many product types and production capacity.Large scale, located above the leading, is expected to fully enjoy the industry development bonus.

Stripping out inefficient industries and focusing on core business, launching equity to encourage established state-owned enterprises to revive the Chinese New Year.

The company’s focus on the core business of electronic components has a clear development strategy. Since 2012, it has continuously separated subsidiaries that are not related to electronic components or have low profitability. It began to compress the entire business in 2018, replacing Zhenhua Communications in May 2019, and mobile phones.The consolidated business is no longer consolidated.

Although the revenue scale will be affected in the future, the profitability will be greatly improved and the sustainable development capacity will be further enhanced.

The company released a revised draft of the equity incentive budget in August 2019. The implementation of future equity incentives will promote the full mobilization of staff enthusiasm and the long-term development of assistants.

In some private enterprises, the company is still at a disadvantage in terms of ROE level and profitability, but the company has obvious advantages in R & D and patent accumulation, and its accumulation over the years is relatively deep.

In the future, we believe that the company’s scale will continue to reduce the core core business of inefficient industries, and tap the internal potential through equity incentives and other methods. Under the background of strong industry demand, the company’s development potential may continue to be released to achieve leapfrog development.Glow the Chinese New Year.

The company’s platform is clearly subdivided, and its major shareholders have rich external assets.

The company’s major shareholder, China Zhenhua, was one of the first batch of national pilot large-scale enterprise groups with abundant high-quality assets.

As the sole listing platform of China Zhenhua, the company has been incorporated into China Zhenhua many times to inject high-quality assets into the company.

At present,重庆耍耍网 there are 13 electronic component-related subsidiaries of Zhenhua in China that have not yet completed asset securitization. Among them, Chengdu Huawei Technology, a leader in integrated circuit design, and the backbone of semiconductor discrete device research and development, Guizhou Zhenhua Fengguang Semiconductor deserves special attention.

Earnings forecast and investment advice: We expect the company’s net profit attributable to its parent to be 2 in 2019-2021.

8.9 billion, 4.

20 billion and 5.

2.1 billion, corresponding to 0 EPS.

56 yuan, 0.

82 yuan and 1.

01 yuan.

Taking into account the estimated level of comparable companies, the estimated level of the company’s history, and the company’s position in the industry’s leading position and future development prospects, the company is given 25 times PE 南京夜网 in 2020, corresponding to a target price of 20.

5 yuan, the first coverage given a “recommended” rating.

Risk Warning: Potential and arrears risks of the whole machine business; the profit improvement of the new energy business is less than expected; uncertainty of asset integration.