Zhenhua Technology (000733) Annual Report 2018 Review: Focus on the Rapid Increase of Military Electronics Profitability

Zhenhua Technology (000733) Annual Report 2018 Review: Focus on the Rapid Increase of Military Electronics Profitability

Investment Highlights The company released its 2018 annual report: revenue 53.

38 trillion, a reduction of 33 a year.

43%; net profit attributable to mother 2.

590,000 yuan, an increase of 27 in ten years.

17%; net profit after deduction to mother 1.

80,000 yuan, an increase of 17 in ten years.


According to the number of reports, the company’s revenue scale has decreased, but the profit level has increased significantly, mainly due to the company’s low gross profit margin of the expansion of the entire machine business expansion, high gross profit margin of the 苏州桑拿网 new electronic components business revenue growth ratio increased.

In 2018, the new electronic component business achieved revenue29.

76 ppm, a ten-year increase4.

84%, accounting for 55% of revenue.

76%, an increase of 16 per year.

75 averages, gross margin 42.

36%, an annual increase of 8.

24 singles; the profitability of the whole machine and system business increased, and the scale of revenue expanded and contracted to achieve revenue of 23.

3.1 billion, a year-on-year decrease of 51.

77%, accounting for 43% of revenue.

68%, a decrease of 16 per year.

61 units.

The company’s net profit attributable to mothers increased faster than the net profit attributable to mothers.

In the reporting year, although the company’s asset impairment loss increased from 8088 million last year to 1.

15 billion U.S. dollars, but the company received government subsidies from 55.94 million last year; non-current asset disposal income was 15.14 million yuan, and last year was -2.08 million yuan, mainly because the company will allocate Zhenhua Tiantong’s equity and exceed previous expectationsCredited to investment income.

In 2019, the company will gather advantageous resources, realize asset securitization and merger and reorganization through the capital market resource allocation function, and promote the extension of the industrial chain from the middle and lower reaches to the upper and middle reaches, and the asset securitization will continue to advance.

According to the latest financial report, we adjust our profit forecast and expect the company’s EPS for 2019-2021 to be 0.



91 yuan / share, corresponding to PE is 26/21/18 (2019/04/17) times, maintaining the level of “prudent increase”.

Risk warning: The compression and replacement of the whole machine and integrated circuit business are less than expected; the profit improvement of the new energy battery business is better than expected; and the injection of external assets is uncertain.