Liquidmetal Technologies Inc (LQMT)

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Flushing Finance and Research
YiAn Technology: Liquid Metal Faucet in the Tesla Industry Chain
2017-06-27 07:01:45 Investment Express
Leading company in the field of liquid metal. Liquid metal is officially called amorphous alloy, and has the comprehensive characteristics of solid, metal, and glass, so its strength is high (more than twice as high as stainless steel and titanium alloy), and plasticity is strong (through injection molding, die-casting molding), which is dominant One of the materials for future high-tech competition. The company is the absolute leader in the liquid metal field. It possesses the world's largest production line for producing zirconium-based amorphous alloys and masters the core technologies in alloy composition, molding technology and equipment, and is the only company in the world capable of producing large bulk amorphous alloy products. the company. In 2016, the company increased the investment research and promotion of liquid metal products and successfully entered the supply chain of Huawei, Nvidia, Tesla and other customers. In the future, there will also be blue oceans such as new energy vehicles, 3C products, wireless charging, high-end medical devices, and aerospace.

Deeply dig magnesium aluminum market space and cooperate with Tesla. Magnesium, aluminum alloy and other lightweight alloy precision casting parts are the company's traditional business. At present, the company's magnesium aluminum alloy products have expanded from mobile phone internal brackets to flat panels and notebook casings, and successfully entered the supply chain of Huawei, Samsung, Lenovo, Wistron, and other well-known enterprises. . The magnesium alloy car door project jointly developed by the company and General Motors won the 2017 IMA Award of Excellence, and also produced automobile steering systems for ThyssenKrupp (TKP) and ZF TRW. . According to information disclosed by the company’s investor activity relations, the company in the automotive sector also cooperated with Tesla. The company’s car door locks made of liquid metal have also been successfully used on Tesla’s new energy vehicles. The future cooperation is more extensive. .

The technical advantages are accumulated and the first quarter results are dazzling. The company plans to raise not more than 650 million yuan in funds to be used in light alloy precision die casting production bases, liquid metal research and development centers, precision structural parts industrialization expansion projects, etc., in order to reduce material costs, expand and optimize product lines. At present, the company's amorphous alloy R&D center construction project is in progress. The high-toughness die-cast aluminum alloy project for automotive anti-impact components has entered the industrialization stage. The clinical trial of the degradable magnesium bone internal fixation screw project has been approved by the State Food and Drug Administration. . In the first quarter of 2017, the company achieved operating income of 165 million yuan, an increase of 74.58% year-on-year; net profit of 9.3591 million yuan, an increase of 125.35% year-on-year. The company holds the technical high ground of liquid metal, magnesium aluminum alloy automotive products, and medical magnesium alloys. The R&D advantages are gradually being transformed into product advantages, and the performance release can be expected in the future.

Profit forecast and valuation. The company has a complete industrial chain for the production of precision die castings of light alloys such as magnesium and aluminum alloys. Since its involvement in amorphous alloys in 2010, the company has achieved breakthrough results, and has now established mass production capacity for amorphous alloys. Will become the company's new profit growth point. We expect the company's EPS for 2017-2019 to be 0.14 yuan, 0.17 yuan and 0.21 yuan, taking into account the company's higher threshold of liquid metal technology, and enter the Tesla industry chain, the future of new energy vehicles is expected to heavy volume, given a certain increase in valuation, According to the industry level, the company is given 100 times PE in 2017, corresponding to a target price of RMB 14.00, giving an “overweight” rating.

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Risk Warning: Downstream demand is less than expected.