Welcome

Tongfu Microelectronics (002156): 1H19 results reached bottom, optimistic about the recovery of traditional packaging and 7NM volume in the second half of the year

Tongfu Microelectronics (002156): 1H19 results reached bottom, optimistic about the recovery of traditional packaging and 7NM volume in the second half of the year
1H19 results were lower than our expectation, and Tongfu Microelectronics announced 1H19 results with revenue of 35.90,000 yuan, an increase of 3 in ten years.13%.Gross profit margin 10.7%, a ten-year average of 6.4 units.The net profit attributable to mothers was expected to be RMB 77.64 million. The overall performance was gradually affected by changes in the industry and gradually exceeded our expectations. Development trend In the first half of the year, performance slipped to the bottom, but the company’s cash flow was still plentiful, showing a good ability to resist cycles.The company’s cash flow from operating activities in 1H19 reached 7.7 trillion, a significant increase of 373% in the past, accounts receivable turnover days of 90 days, about 4 days lower than the same period last year.Accounts payable turnover days were 108 days, an increase of 8 days about the same period last year.We believe that the improvement in cash flow reflects the company’s good sales receipts, its upstream bargaining and supply chain management capabilities, and its ability to resist downward cycle risk has deteriorated. Since the second quarter, the recovery trend is determined.Starting in the second quarter of 19th, through the low-end small chip orders began to pick up, Tongfu’s traditional business throughput growth gradually improved, the company’s revenue rebounded 17%, the gross profit margin increased 3%.8 units with net profit of -24.41 million yuan, a substantial reduction in losses of -53.23 million yuan in the first quarter.We believe that the smooth digestion of industry inventory will help the company’s orders continue to rise.Although the macro-environmental change still brings uncertainty, the market expectation gap is shrinking continuously. It is a high probability event that the demand side rebounds significantly with the season in the second half of the year. AMD’s business income continues to grow and its product structure is gradually optimized.In 1H19, under the pressure of the industry’s downward cycle, the income of Thomson Chaowei Suzhou and Penang packaging and testing plants still achieved a 32% annual increase.We believe that even the cumulative maximization of AMD-related packaging and testing business is affected and the gross profit margin is reduced. However, as the company 南京桑拿网 continues to expand its research and development and improve its product structure (the research and development expenses increased by 50% in 2018), the proportion of high value-added products has increased.Still harvesting revenue growth faster than peer performance.At present, 7nm products have been tested in Chaowei Suzhou. The CP / Bumping business will gradually increase in the second half of the year, which will continue to promote the increase in the value of Tongfu products. Earnings forecasts and estimates As the company’s traditional and advanced packaging business averages continued to be affected by the industry’s downward cycle breakthroughs in the first half of the year, we lowered our 2019 revenue / net profit forecast by 4% / 95% to 79.4 trillion / 8.08 million yuan.We are optimistic about the recovery of the industry in 2020 and the volume of 7nm products. We raise our 2020 revenue / net profit forecast by 5% / 10% to 104.6 ppm / 3.400000000.The current consensus of the company corresponds to 1.7x 2020 P / B, we maintain our Outperform rating and 10.Target price of 50 yuan, corresponding to 1.9 times the 2020 P / B ratio, there are 14.8% upside. Risks AMD’s new product sales fall short of expectations, uncertainties in the macro environment affect the recovery of the semiconductor industry