Huatian 杭州夜网 Technology (002185) Company Tracking Research Report: Packaging and Testing Industry Recovery Overlaps CIS High Prosperity Attempts to Usher in a Turning Point in Performance

Huatian Technology: A leading company in packaging and testing with extensive business layout.

Huatian Technology is the top packaging and testing company in mainland China and worldwide revenue.

In 2018, the company suffered from the distortion of the industry’s prosperity caused by changes in the external environment, and its performance changed.

The company’s revenue for the first three quarters of 2019 was 61.

0.7 million yuan, an increase of 9 in ten years.

85%; net profit attributable to mother is 1.

68 ppm, 48-year average.

81%.

However, since Q2 2019, the company’s revenue and net profit have clearly rebounded.

We expect this trend to continue in 2020, bringing continued growth momentum.

Packaging and testing industry: The overall boom is picking up, which is good for leading enterprises in the industry.

In 2018, affected by the decline of the overall semiconductor cycle, the packaging and testing industry’s growth index.

From the second quarter of 2019, through the rebound of the semiconductor boom, the packaging and testing industry has also rebounded significantly. The monthly revenue change of the key packaging and testing manufacturers in Taiwan, China has also shown a rebound in the industry’s prosperity.

At the same time, the transfer of orders from major customers in mainland China will accelerate domestic substitution, which will benefit leading companies in the packaging and testing industry in mainland China.

CIS packaging and testing: tight supply under high economic conditions, rising prices and expanding capacity expansion will bring performance flexibility.

The CIS market is developing rapidly. According to IHS data, is the global CIS market in 2018?
It will remain 8 in 2023.

8% compound growth.

The multi-camera trend of mobile phones increases the demand for CIS in the low and medium, driving the demand for CSP / TSV packaging; and the growth rate of the security and automotive CIS markets.

At the same time, the domestic substitution of CIS packages is accelerating, which is good for CIS packaging and testing enterprises in mainland China.

Profit forecast and rating.

What do we expect the company 2019?
In 2021, the EPS will be 0.

11/0.

29/0.

38 yuan / share.

The average PE of comparable companies in the same industry is estimated to be 54 in 2020.

Three times, it is estimated that it is mainly due to the performance recovery in 2020.

Huatian Technology’s performance is relatively stable. Considering the valuation of comparable companies in the same industry and Huatian Technology’s relatively stable performance and historical estimation level, we give Huatian Technology a PE valuation of 40X in 2020, the reasonable value is.

73 yuan / share, give the company a “Buy” rating.

risk warning.

Risks that the industry’s business climate will decrease; risks that the CIS industry’s business climate exceeds expectations; Unisem integrates previously expected risks.