Core point of view
Profits fell slightly and investment in research and development increased. In the first half of the year, the company achieved revenue of 3.3 billion yuan, an increase of 5% over the same period last year, and a net profit of 470 million yuan, down 5% from the same period last year.
The gross profit margin for the first half of the year was 26.4%, down slightly from 27.6% in the same period last year. The company increased its R & D investment, with 170 million yuan in R & D in the first half of the year, an increase of 40%
The automotive electronics business is full of orders in the next three to five years. The company can provide vehicle Sensor, vehicle touch module, vehicle cover, vehicle display module and other products, but also to provide dashboard module, rearview mirror module, central control screen module and other integrated touch display module business. This part of the company's business customers cover Japanese, European, American, German, domestic independent brand car factories, etc., with full orders in the next three to five years, of which the cumulative amount of 3D curved surface module framework agreement is billions of yuan. At the same time, the G4.5 generation production line of the company is in mass production, which solves the shortage of Sensor, the core component of the vehicle screen, and ensures the production capacity demand of the vehicle electronic business.
UTG has broad business prospects. The company ranks first in China in terms of thinning business scale, relying on thinning technology advantages, fine glass processing advantages and supply chain advantages to speed up the UTG (flexible foldable cover glass) business layout. At present, the company has shipped in small quantities, and the company ranks first in the industry in product quality and shipping scale. According to the forecast of Strategy Analytics, the global shipments of foldable mobile phones are expected to reach 100 million units by 2025, driving the rapid expansion of UTG demand.
Consumer electronics module business continues to expand. Wearable module business is leading in the industry, with customers covering the top five smart wearable customers. At the same time, it has mastered the core technology of flexible OLED module and shipped to North American major customers. Flexible OLED is expected to further expand domestic customers in the future. In terms of VR display modules, the company's products have high refresh rate (90Hz) and high PPI (772). At the same time, monocular pixels reach 1832 × 1920, supply Quest series, and actively develop MicroOLED modules, benefiting from the rapid development of the VR industry. Relying on the technology and customer advantages in the field of mobile phones and wearables, the company is actively expanding the business of high-end NB and Pad modules, including Lenovo, Asustek, Dell, HP, Huawei and so on.
Financial Forecast and Investment suggestion
We forecast the company's earnings per share for 21-23 years to be 0.44,0.53,0.64 yuan respectively (the original forecast is 0.54, 0.66, 0.78 yuan, and downgrade the revenue forecasts for Depter, medium and large size modules). According to the comparable company, we maintain a 22-year 17-fold PE valuation, corresponding to a target price of 9.01 yuan, and maintain a buy rating.
Risk hint
Consumer electronics and automotive businesses are not progressing as expected; UTG penetration is not as expected; and Bic Power is at risk of impairment.