Event: the company released a semi-annual report for 2021, with revenue of 2.004 billion yuan, an increase of 50.64% over the same period last year, and a net profit of 141 million yuan belonging to shareholders of listed companies, an increase of 259.19% over the same period last year.
The company's Mini LED technology, products and production capacity are in the lead in China. The company began to layout Mini LED as early as 2018, when it received small batch orders at home and abroad.
According to experts, the commercialization process of Research,Mini LED backlight industry began in 2018, and 2019 is the first year of Mini LED backlight application. This year, a number of consumer electronics products with Mini LED screens were born, and Mini LED ushered in a critical point of mass production. According to the forecast of Ji Bang Consulting, the Mini/MicroLED market is expected to grow rapidly, from US $78 million in 18 years to US $4.2 billion in 2024, with CAGR of 94%, benefiting from strong demand for TVs, monitors, central control displays and other terminals. The company signed the first and second phase investment agreements of the Mini LED new display project with the people's Government of Huadu District of Guangzhou City in June and December 2020 respectively.
Among them, the investment of the first phase of the project is about 150 million yuan, with a planned output value of 600 million yuan, which has been officially put into production, the main equipment has been put into commissioning and production, and the capacity utilization rate is relatively high; the planned output value of the second phase of the project is 4 billion, and construction has begun to lay the foundation. The company's capacity reserve is in a leading position in the industry, and it is currently one of the few enterprises in the world with large quantities of Mini LED backlight products. Zhixian has also shipped in bulk, with customers covering TCL, BOE and other giants.
The order increment of the company is obvious, the LED packaging business is in short supply, the production capacity has been effectively released and improved, and the revenue and profit have increased significantly. The gross margin of the package plate is 32.17%, the capacity utilization rate is 83.97%, and the overall yield of the product is 97.05%. According to the company's production expansion plan at the end of last year, Guangzhou branch is expected to double its production capacity, which is now beginning to be reflected, and capacity utilization is expected to reach 70%, 80%, by the end of the year; Jiangxi Hongli is expected to increase its production capacity by 1.5 times. In the long run, with the rising production costs and technological upgrading of the LED packaging industry, we believe that small and backward production capacity will be further cleared, the company will significantly benefit from the process of increasing industry concentration, and with the smooth progress of the production expansion plan, the company's performance will further thicken and stabilize its market position.
Automotive lighting business showed a clear inflection point, gross profit margin increased by 3.28 percentage points. Among them, Foda signal export business growth is obvious, orders are full, production capacity is tight, and there is a need for further expansion; Yishan car lights actively optimize the customer structure, the product gross profit increases, the cost decreases, the expansion is smooth, and the operation as a whole shows a trend of improvement. The loss has been greatly reduced, and it is expected to reverse the loss in the second half of the year.
Investment rating and valuation: we believe that the LED industry, which has experienced the plight of overcapacity since the second half of 2018, is re-entering the uplink cycle, promoting the performance growth of traditional packaging companies; at the same time, with the further popularity of Mini LED application, the company's forward-looking layout in the relevant domain will provide a driving force for the company to seize the market and increase market share. From 2021 to 2023, the company is expected to achieve revenue of 42.51,54.37 and 6.964 billion yuan, and realize net profit of 3.55,5.62 and 694 million yuan, corresponding to EPS of 0.50,0.79,0.98 yuan respectively. Give a "recommended" rating.
Risk tips: COVID-19 mutation virus spread; Mini LED application popularity is not as expected; the new show that the first and second phase of the project capacity release is not as expected.
