1H21 revenue slightly increased year-on-year, year-on-year net profit decreased slightly, 2Q21 performance fell year-on-year on August 26 long letter released the report, 1H21 revenue of 3.255 billion yuan (YoY 4.66%), home net profit of 467 million yuan (YoY-4.92%), gross profit margin fell 1.13pct to 26.44%. 2Q21's revenue is 1.701 billion yuan (YoY-3.41%) and its net profit is 236 million yuan (YoY-21.06%). The decline in performance compared with the same period last year is mainly due to the high base of 2Q20 (strong demand for touch display devices under the 2Q20 "residential economy" and an increase in the transfer order of LCD industry transfer and thinning business). We continue to be optimistic about the company's performance growth in wearable touch modules, VR modules, UTG glass, car central control screens and other areas. It is estimated that in 21-22-23, the annual EPS will be 0.51 EPS 0.62 PE 0.77 yuan, with reference to the comparable company's 21-year Wind consensus average value of 20.30 times PE valuation, giving the company a 21-year 20-fold PE valuation, with a target price of 10.30 yuan, maintaining a buy rating.
The company continued to increase its R & D efforts. The 1H21 R & D expense rate increased year-on-year. The 1.26pct1H21 R & D expense rate increased to 9.18% year-on-year, in which the sales expense rate decreased to 1.12% year-on-year, the management expense rate decreased to 2.37%, the R & D expense rate increased to 4.96%, and the financial expense rate increased to 0.67pct to 0.73%. 1H21 has increased its investment in R & D. by the end of June 2021, the company has obtained a total of 299 authorized patents, including 28 invention patents and 271 utility models. According to the China News, under the background that the new energy industry chain has become one of the important industrial paths to achieve the carbon emission target, the company continues to maintain high-intensity investment in the research and development of on-board displays and devices. a variety of technical achievements such as 3D vehicle curved cover and dazzling color display have been achieved, and a number of 3D vehicle projects have been fixed, and the cumulative amount of the framework agreement has reached billions of yuan.
The company's intelligent wearable module, VR display module business customers are of high quality, and terminal shipments are high compared with the same period last year. As an industry leader in the field of wearable modules, according to the China News, the company provides middle and high-end wearable products for the top five international smart wearable terminal customers, exclusively for small genius Z series, Huawei GT series, XIAOMI flagship watches and OPPO wearable watches. 1H21 global smartwatch shipments rose 47.61 per cent year-on-year to 53.8883 million units, according to IDC. In addition, the company laid out VR display module business earlier. According to the China News, the company actively provided Quest series VR head display module products to North American VR flagship customers, and on this basis accelerated the research and development of high-generation VR head display module equipped with Micro LED; according to IDC data, 1H21 global VR equipment shipments increased by 100.45% to 3.1512 million units compared with the same period last year, of which Quest series shipments increased by 296.77% to 2.2586 million units.
Maintain the annual profit forecast for 21-22-23, give the target price 10.30 yuan, maintain the purchase rating we maintain the company's annual net profit of 12.64 billion yuan in 21-22-23, refer to the comparable company's 21-year Wind consensus average value of 20.30 times PE valuation, give the company 2021 20 times PE valuation, target price 10.30 yuan (previous value: 10.04 yuan), maintain the buy rating.
Risk hints: the demand for 3C products has declined repeatedly in the epidemic; the expansion of flexible OLED is not as expected.