He Ertai (002402) quarterly report comments: Fixed assets and industrial parks continue to grow and put into production. Long-term growth is worth looking forward to.

He Ertai (002402) quarterly report comments: Fixed assets and industrial parks continue to grow and put into production. Long-term growth is worth looking forward to.

On the evening of October 22, the company released the 19Q3 quarterly report: revenue 26.

55 ppm, +38 a year.

8%, net profit attributable to mother 2.

4 ‰, +30 a year.

2%, R & D expenses 1.

2.3 billion, accounting for 4% of revenue.

6%, +92 per year.

47%, operating cash flow2.

900 million, before +353.

12%; single quarter revenue is 0.

920,000 yuan, ten years +33.

63%, net profit attributable to mother 0.

710,000 yuan, +26 for ten years.

25%.

The first three quarters of performance continued to grow at a medium and high speed, mainly due to the increase in reports and customer orders, and the increase in NPE revenue of Sun.

The revenue of the subsidiary Changchang Technology increased, and the advance payment from suppliers increased: ① Notes receivable 2.

12 trillion, +47 a year.

25%, mainly due to the increase in sales revenue of Kunchang Technology, and the bills receivable received increased by 0.

6.8 billion yuan.

② The advance payment was 21 million yuan, a year-on-year increase of 15 million yuan, which was mainly due to the increase in prepayments of the suppliers by Kunchang Technology.

The company’s convertible bonds were successfully issued, and the second phase of its main business, the Bright Industrial Park, went into operation. Future business growth is worth looking forward to: The company’s convertible bonds were successfully listed on June 28.

A total of 5 convertible bonds were issued at par.

47 ppm (5.47 million sheets) with a term of 6 years and a coupon rate of 0 per year.

4% / 0.

6% / 1% / 1.

5% / 1.

8% / 2%, the funds will be used for the construction of the Yangtze River Delta production and operation base (4/4.

900 million), electronic process automation and big data operation management platform system (0.

8/1.

2.8 billion), smart life big data platform system project (0.

67/2.

02 billion).

(Note: The former is the amount of funds invested by convertible bonds, and a small amount is the amount of the project.) The company’s production line rapid new equipment input and old equipment update: ① Guangming Industrial Park Phase II Q3 production, 1.

The US $ 400 million construction in progress was converted into fixed assets. ② Budget. During the reporting period, the company’s operating scale expanded and production equipment investment increased by 1.

At the same time, it also prepaid funds for production equipment and terminated 19Q3 fixed assets totaling 6.

05 ten percent, +69.

17%; other non-current assets (mainly prepaid production equipment) 61.49 million yuan, +271 per year.

64%; the deferred diabetes coefficient increased by 3.95 million yuan (corresponding to a depreciation of 26.33 million according to a 15% score), which was mainly due to the accelerated upgrading of old equipment. Chang Technology: A domestic leader in analog phased array radar T / R chip components, good performance growth. Active phased array radar is a major military technology development direction for military powers. Microwave millimeter wave RF T / R chip components areIts core components and key technologies.

Kunchang has conquered the core technology of analog phased array radar T / R chip components, making the large-scale promotion of internal active phased array radar a reality: ①Military products: high gross profit margin, market scale breakthrough, has been finalized and applied in batchThe main customers are large enterprises in the field of national aerospace, military institutes and weapons and equipment, which have core competitive advantages in the domestic industry.

②Civilian products: Lichang pays attention to the huge market development potential brought by the Internet of Things and 5G mobile communications, and has already fully laid out and reserved in the corresponding fields. In the future, it will serve the parent company’s Internet of Things and the implementation of artificial intelligence big data high-dimensional strategic layout.

In 2018 the company started with 6.

Completed a cash purchase 杭州桑拿 of 80% equity in Quanchang with 24 ppm consideration. Net profit commitments for 2018-2020 were 0.

51/0.

65/0.

7.9 billion; the acquisition passed the review by the National Defense Technology Agency and was completed on June 1.

In 2016-2018, Qichang had zero revenue.

22/0.

64/1.

30,000 yuan, net profit 0.

04/0.

27/0.

660,000 yuan, 19H1 revenue 1.

30,000 yuan, net profit 0.

5.5 billion, broad prospects for future growth.

Earnings forecast and rating: The company focuses on the production line layout, and the revenue realization may be slightly affected. It will fine-tune the revenue growth rate of 19-21 from 36% / 35% / 33% to 35.

23% / 34.

61% / 32.

72%, revenue was 36.

1/48.

6/64.

500 million, net profit attributable to mother 3.

0/4.

1/5.

500 million, EPS is 0.

35/0.

48/0.

65 yuan, according to the closing price of 12 on October 21.

33 yuan, PE is 35.

5/25.

9/19.

3. Maintain “Buy” rating.

Risk reminders: adjustment of the company’s production line layout, adjustment of the delivery pace of Jichang products, and risks of exchange rate changes.