Events:
The company announced that the operating income in the first half of 2021 was about 1.959 billion yuan, + 60.37% compared with the same period last year; the net profit of returning to the mother was about 251 million yuan (the previous forecast range was 2.4-280 million), + 111.41% compared with the same period last year; and deducting the non-return net profit of 218 million yuan, + 114.55% compared with the same period last year. Comments are as follows:
Comments:
1. The performance grew against the trend in the first half of the year, mainly due to the elastic release of reserve capacity. It was estimated that the revenue in the second quarter was 1.067 billion yuan, which was + 45.86% compared with the same period last year and 19.62% compared with the previous year. The first-half gross profit margin is 24.27%, year-on-year + 0.79 pcts, second-quarter gross profit margin is 22.6%, year-on-year-1.5 pcts month-on-year-3.6 pcts. The rapid growth in performance in the first half of the year was mainly due to improved demand driving the flexible release of the company's production capacity, as well as the release of new products such as mini. Gross profit margin declined in the second quarter compared with the same period last year, mainly due to the impact of rising prices of raw materials. In addition, the company focused on promoting the landing of the Zhaoqing factory on the premise of achieving rapid performance growth in the first half of the year.
2. MiniLED/ consumption / vehicles and other orders are growing rapidly, and internal potential is tapped to give full play to the technical advantages of jigsaw puzzle. In terms of business, the income of single / double panels in the first half of the year is 432 million yuan, year-on-year + 134.87%, gross profit margin 19.99%, year-on-year-2.58 pcts; four-layer and above board income 1.419 billion yuan, year-on-year + 43.77%, gross profit margin 20.21%, year-on-year-0.01 pcts. The significant increase in single / double panel income was mainly due to the introduction of orders for miniLED products, and its gross profit margin decreased compared with the same period last year. In addition to the copper clad laminate factor, the slope of the production line and yield fluctuation in the early stage of new product preparation are also affected. The revenue of the four-tier and above boards also maintained rapid growth, mainly due to the overall recovery of orders for vehicles, home appliances and NB in the first half of the year, as well as the effective release of the company's reserve capacity last year, the overall gross profit margin of the business was stable, less affected by the price increase of copper clad laminate, mainly due to tapping the potential within the company and the improvement of management efficiency, giving further play to the technical advantages of jigsaw puzzle.
3. The industry as a whole has shifted from full recovery to structural growth, and miniLED board space can be expected to look forward to the follow-up. The current growth rate of orders from NB/ home appliances and other directions begins to slow down, and the overall car board orders may still be affected by lack of core in the second half of the year, but the weak 5G communications orders in the first half of the year are expected to gradually pick up in the second half of the year, and the company is actively promoting the introduction of orders related to the new generation server platform in the data center The proportion of shipments of high-tech products is also expected to increase in the future. In terms of miniLED board, the company is Samsung's largest supplier and has gradually cut into other mainstream miniLED customers. We expect the company's total capacity reserve by the end of the year to be close to 900,000 square meters per month. This year's average monthly output is expected to reach 600,000 square meters, of which the miniLED board is more than 100000 square meters. With the launch of the Zhaoqing plant, the company's total production capacity is expected to exceed 1 million square meters next year. If the industry demand remains stable, the company's average monthly output is expected to continue to grow. The proportion of miniLED boards is also expected to be close to 30 per cent.
In the long run, the company's layout in high-end vehicles, any order of HDI and other areas is also worth looking forward to.
4. Investment suggestions
We are optimistic about the company's continued capacity expansion to seize structural market opportunities and its technological leadership in areas such as miniLED. The estimated revenue for 21-23 years is 43.7 shock 56.8pm 71.0 billion, the net profit of return to the mother is 5.5max 7.2 / 870 million, the corresponding EPS is 3.45max 4.51pm 5.50, and the corresponding share price PE is 29.8max 22.8max 18.6 times, maintaining the "highly recommended-A" rating.
Risk tips: industry demand is lower than expected, peer competition intensifies, technology iteration risk.