研报日期：2017-09-14

　　中航光电(002179)　　Order momentum picking up; Buy on multi-year earnings upcycle ahead　　We visited Jonhon Optronic's Luoyang headquarters last week and came backwith positive takeaways. Despite lagging revenue conversion in 3Q, the strongpick-up in new orders, along with new capacity expansion, should accelerateearnings growth to 26% yoy in 2H17 (vs. 11% in 1H17) and 30% starting2018. With similar drivers ahead, the 2013-15 earnings upcycle - when the stockoutperformed its benchmark (SZCOMP) by 100% on strong earnings growth -looks likely to be repeated. We raise our target price by 23% to Rmb43 andmaintain Buy.　　Strong new order pipeline　　Management guided for a back-end loaded 2017 at the beginning of this year andexpects growth for defence and NEV to speed up in 2H. Since the beginning of3Q, the company has indeed been seeing a strong new order pipeline from itscustomers for both segments though the actual signing of contracts may come abit later than expected due to military reform (hence organizational reshuffle) andstricter subsidy scheme (hence reevaluation of subsidy eligibility required). Givencapacity constraints (for NEV) and defense customers' delivery schedules, webelieve deliveries could be very skewed towards 4Q17 with revenue conversionof some orders potentially delayed to 1H18.　　Multi-year earnings upcycle in sight, with upside potential　　During a 5-year plan (FYP) period, Jonhon's earnings growth tends to pick up fromthe third year and accelerate sharply into the final two years. With acceleratingweapon modernization, next-generation mobile network (5G in this FYP period),vehicle electrification and new capacity expansion, we project a 33% earningsCAGR over 2017-19 (vs. a 29% CAGR over 2012-14). T aking into account thehigh base, our current projection as……[Deutsche Bank AG][点击查看PDF原文] 今日最新研究报告

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