Event: the company released a forecast for the third quarter of 2021 and expects to achieve a net profit of 41 million yuan to 51 million yuan in the first three quarters of 2021, an increase of 6478.95% to 8083.57% over the same period last year. It is estimated that Q3 will achieve a net profit of 2060-30.6 million yuan in 2021, a substantial turnround over the same period last year, with an increase of 24.85% over the previous month. 85.45%.
COB-based Micro LED ultra-high definition shows that the product volume continues to be released, and the performance is accelerated: the company's homing net profit in the first three quarters increased by 6478.95%-8083.57% compared with the same period last year. Q3's homing net profit in 2021 increased by 24.85% Mel 85.45% compared with the same period last year, which increased significantly compared with the same period last year. In the domestic market, driven by the new changes in 5G+8K 's ultra-high definition vision, the company's Micro LED ultra-high definition display products based on COB technology continue to expand, the construction of domestic regional sales network and showroom is further accelerated, the market share in the field of COB special and commercial display applications continues to increase, and domestic business income has achieved rapid growth. In terms of overseas markets, the company has strengthened its coverage of international and regional markets. The demand for export orders continued to increase in the first three quarters of 2021, and overseas revenue increased compared with the same period last year.
Small spacing shows accelerated penetration to small spacing, the LED display industry is expected to grow rapidly: from the demand side, thanks to the rapid development of 5G+8K, breakthroughs in new technologies of Mini and Micro LED, and effective control of the domestic epidemic, the demand of the LED industry continues to pick up and the prosperity remains at a high level. According to TrendForce, the global LED display market demand in 2020 is 13.59% lower than in 2019, and the market space is expected to grow by 12% in 2021. In addition, with the increasing demand for clarity in the dedicated, commercial and household display markets, micro-spacing (below P1.0mm) display will become a new favorite in the market. At present, ultra-small spacing display screens under P1.0 are rapidly infiltrating and are widely used in security monitoring, corporate meetings and educational space. According to TrendForce, shipments of small and micro-spacing products reached 160000 units in 2020, an increase of nearly 10% over the same period last year, and is expected to reach 260000 units in 2021, an increase of nearly 59% over the same period last year. The market size of small spacing display screen in 2020 is US $2.738 billion (YoY+5.0%). With the continuous expansion of the application field of LED small spacing display screen and the increase of shipments of ultra-small spacing display screen ≤ P1.0 year by year, CAGR will be 27% in 2020-2025. It is expected that the industry will continue to maintain a high growth momentum in the next few years.
Micro LED private giant screen cinema released, a milestone to enter the home consumption blue sea market: the company recently released "Micro LED private giant screen cinema" 4K flagship version of the 138in series, starting at 499999 yuan. The product uses Micro LED based on COB technology to splice ultra-high-definition ink screen, with a contrast of 1, 000 and 1, a color gamut of 125%, a visual angle of 170 °, and a HDR display effect, making the movie more immersive. The company locates its products in the super-large household consumption market and has a differentiated competitive advantage. At present, the less than 100inch display is still dominated by LCD and OLED, so it is difficult to provide immersive viewing experience; although laser technology is suitable for the market above 100inch, the picture color of laser technology is greatly affected by ambient light, and the display effect needs to be improved.
Micro LED not only has excellent display effect, but also has small restrictions on product size, and it is easy to install at home. The company's new Micro LED home theater products focus on oversized tracks, with significant advantages over their peers in price, and are expected to accelerate penetration in high-end residential buildings, private cinemas, high-end clubs, e-sports venues and other fields in the future.
Maintain the "buy" rating: we are optimistic that the company will continue to take the lead in COB technology. With the acceleration of ultra-small pitch market penetration in the future, COB packaging under P1.0 is expected to become the mainstream development direction in the future, and the company has obvious first-mover advantages. At the same time, the LED display industry has entered a period of repair affected by the epidemic, market demand is expected to recover as a whole, and the company's business is expected to benefit from the overall recovery of the industry. It is estimated that the return net profit of the company from 2021 to 2023 is 329 million yuan for 0.82, 0.81 and 0.94 yuan for EPS, respectively, and the corresponding PE is 43x, 19x and 11x, respectively.
Risk tips: market demand is not as expected, small spacing LED screen penetration is not as expected, production capacity climbing is not as expected, and the company's product promotion progress is not as expected.