TD Optics (002632) Company dynamic comment: Reflective film business grows steadily Aluminum and plastic films and optical films are expected to contribute incremental performance

TD Optics (002632) Company dynamic comment: Reflective film business grows steadily Aluminum and plastic films and optical films are expected to contribute incremental performance
Event: The company released a performance report for 2018, reporting that the combined company achieved total operating income12.0.6 billion, an increase of 49 over the same period last year.81%; operating profit 2.8.7 billion, a year-on-year increase of 87.84%; total profit 2.860,000 yuan, an increase of 90 over the same period last year.99%; net profit attributable to shareholders of listed companies2.400,000 yuan, an increase of 93 over the same period last year.80%. The license plate film and license plate semi-finished products business improved the company’s performance.At the report level, the company ‘s glass bead product business has grown in the downstream license plate film and license plate semi-finished product market. Product added value supplements The company ‘s main glass bead-based reflective materials have achieved rapid growth; in the future, about 30 million vehicles will be added each year.30 million sets of license plates are needed, and 5-6 sets of license plates can be used per square license plate film. It is expected to increase the market by 6 million square meters every year in the future, and convert more provinces.The license plate semi-finished product supplier changes, and the overall license plate film and semi-finished product market size will show substantial growth, and the company is expected to gain a higher market share. The production capacity of microprism film is gradually released, which is expected to contribute incremental performance.The company is the first domestic leader in the world to break through the microprism reflective film technology barriers. It has a glass microbead reflective film production capacity of 16.8 million square meters, a microprism light emitting film production capacity of 10 million square meters, and a reflective cloth production capacity of 13.2 million square meters.Clothing capacity is 5 million sets.About 3M, Avery, Ruifei and other foreign companies that have suffered colonial rule in the future, the company will take advantage of good service and a slightly lower 15% -20% price advantage in the future, and is expected to quickly seize the domestic market.The company’s sales of high-margin products such as micro-prism reflective film increased the company’s overall gross profit level.In the first three quarters of 2018, the sales volume of microprism reflective film reached 1.97 million square meters.With the further release of production capacity, the company’s microprism film business is expected to contribute incremental performance in the future. The certification phase of the aluminum battery in the field of power batteries is about to enter the harvest period.Aluminum plastic film is one of the key materials for flexible lithium battery packaging, and it is also one of the key barriers in the lithium battery industry chain.The global aluminum plastic film market and technology have been monopolized by a few companies such as Japan and South Korea, and the domestic production rate is less than 5%.Among them, the global market share of aluminum-plastic films produced by DNP and Showa Denko reaches about 70%.Due to the strong monopoly of aluminum-plastic film, prices have remained high, and gross profit margins have exceeded 50%.At the same time, the cost of aluminum-plastic film accounts for about 15% of the cost of soft pack batteries, and the price gap between domestic and foreign prices is about 20% -30%.Domestic lithium battery manufacturers urgently demand to reduce the cost of lithium battery raw materials. Therefore, the aluminum plastic film has realized import substitution, and the domestic demand has become increasingly prominent.The company’s aluminum plastic film adopts a dry process and has entered a stable mass production stage in the second quarter of 2017. The performance indicators are consistent with the performance of similar products of foreign brands. It is 杭州桑拿 one of the very few domestic companies that can mass produce aluminum plastic films.At present, the company has obtained more than 50 3C lithium battery enterprise orders. Mainstream power customers are in the certification stage. Some small manufacturers and mopeds have already purchased power-based membranes.With the completion of certification, the company’s aluminum plastic film business is expected to enter the harvest period. With the acquisition of Warwick, the layout shows optical films, and the future of quantum dot films is promising.Warwick New Material’s main products are multifunctional composite brightness enhancement film rolls for LCDs and optical film sheets (synthetic liquid crystal module optical films). The main customers include TCL, Zhaochi, Skyworth, Kangguan, Huike and other domestic and foreignenterprise.At present, the quantum dot film has been installed and debugged to achieve mass production conditions, which is expected to become a new growth point for the company’s profits. Investment suggestion: The company is a leader in the field of domestic reflective materials. The traditional business has grown steadily, and emerging businesses are expected to provide performance growth points in the future.The company’s 18-20 EPS is expected to be zero.38 yuan, 0.48 yuan, 0.61 yuan; the corresponding PE is 22.16X, 17.59X, 13.90X; Maintain “Highly Recommended” rating. Risk reminder: The prosperity of the reflective material industry is highly expanded, and the range of demand for aluminum-plastic films shows that the demand for optical films has increased significantly.