Huiding Technology (603160) financial report review: the inflection point of the performance of the leading fingerprint chip

Huiding Technology (603160) financial report review: the inflection point of the performance of the leading fingerprint chip under the screen

[Key points of investment]The company released the 2018 annual report and the first quarter report of 2019, and the company achieved operating income of 37 in 2018.

21 ppm, an increase of 1 year over 2017.

08%, net profit after deduction is 6.

72 trillion, an estimated drop of -22 in the same period last year.

83%, performance basically in line with expectations; operating income in the first quarter of 201912.

25 trillion, an estimated increase of 114 in the same period last year.

39%, net profit after deduction is 3.

89 trillion, an estimated increase of 3129 in the same period last year.

86%, significantly exceeding market expectations.

The volume of fingerprints under the optical screen showed a turning point in performance.

The company’s performance bottomed out in the first half of the year, and its revenue and net profit increased. However, in the second half of the year, the rapid volume of fingerprint chips under optical screens was resumed, and profitability returned to the fast track of growth. The company’s overall gross profit level rose significantly to 52.

18%, up to 61 in 19Q1.

43%, showing a rapid rise.

Although 19Q1 is the traditional consumer electronics off-season, the company realized that the off-season is not off-season, with single-quarter revenue of 12.

2.5 billion yuan, after deducting non-return to the mother’s net profit3.

8.9 billion, significantly exceeding market expectations.

The fingerprint function under the screen is standard for the flagship prototype, and the future growth space is broad.

According to the latest forecast data from IHS Markit, the volume of screen fingerprint module is expected to reach 1 in 2019.
.

800 million, except for Apple, other manufacturers will take it as a key feature for future development.

Since 19 years, the top four domestic mobile phone manufacturers Huawei, Xiaomi, OPPO, and VIVO have all released their flagship mobile phones. The fingerprint chips under the screen are exclusively provided by Huiding Technology. The company has absolute capabilities in the field of fingerprint chips under the screen.

High research and development created a moat.

The company has carried out many years of research and development on the fingerprint chip under the screen, and the research and development expenditure in 2018 was 8.

3.8 billion, an annual increase of 40 compared to 2017.

50%, accounting for 22.7% of operating income
.

53%, the company has a total of 1053 R & D personnel, accounting for 88 of the total number of companies.

04%.

At present, the company can provide an integrated under-screen fingerprint chip solution from algorithm, sensor to module, and gradually apply for and obtain more than 500 related domestic and domestic patents, forming the 无锡桑拿网 company’s strongest moat.

The emerging areas of the Internet of Things will become the company’s growth driver in the next 3-5 years.

The company has accelerated its layout in the field of Internet of Things and has made great progress. It has officially launched a comprehensive platform in the field of Internet of Things, which can implement sensors, MCUs, security, connectivity and other applications, including wearable device detection andTouch two-in-one solution, low-power heart rate detection chip and smart door lock solution of “secure MCU + living fingerprint”, the broad market of the Internet of Things will provide new growth momentum for the company in the future.

[Investment suggestion]Benefiting from the rapid volume increase of the fingerprint chip under the optical screen, the company’s profitability has risen significantly. We have raised the company’s profit forecast, but considering the price reduction of the fingerprint chip under the screen and the company’s new product introduction to the time it can contribute to profit is still relativelyEarly on, the company’s net profit will expand to a certain extent in the future. It is estimated that the operating income for 19/20/21 will be 52.

82/64.

47/68.

1.9 billion, net profit attributable to mother is 16.

02/15.

62/14.

9.3 billion, with EPS of 3.
51/3.

42/3.
27 yuan, corresponding to 34/34/36 times the PE.

Maintain “Buy” rating.

[Risk Warning]Competition for fingerprint chips under the screen is intensified; IoT products cannot contribute profits in the short term.