Main points of investment: accelerated distribution bureau in the field of intelligent cockpit; Q3 revenue increases steadily, product iteration in the field of terminal applications, and continuous extension of downstream demand.
Announcement. In order to speed up the development of touch display equipment in the intelligent cockpit of new energy vehicles, Lianzhan Optoelectronics issued an announcement on November 10, 2021: it intends to use its own capital of 25.87 million yuan to acquire a 10% stake in Hongtong Technology, a wholly-owned subsidiary of Xiangda Optics Co., Ltd. The business resources and customer channels of Hongtong Technology will help to speed up the entry of Optoelectronics into the field of on-board intelligent cockpit and open up domestic vehicle customers dominated by new energy vehicles.
The Q3 company achieved both an increase in operating income and a return to home net profit, with a record year-on-year increase in revenue in a single quarter.
In the first three quarters of 2021, the company achieved operating income of 1.115 billion yuan (year-on-year + 17.24%), and net profit attributable to shareholders of the parent company was 113 million yuan (year-on-year + 16.39%). Among them, Q3 achieved operating income of 437 million yuan (year-on-year + 62.65%) in a single quarter, and net profit belonging to shareholders of the parent company was 48 million yuan (year-on-year + 106.32%).
In 2021, Q3 Company achieved both operating income and return net profit, and the revenue growth in a single quarter reached a record high compared with the same period last year, mainly due to the improvement of the global epidemic situation after Q2 in 2021 and the gradual recovery of downstream demand. the company ensures that order delivery has achieved great results and actively expand downstream business areas and customers. Q3 in 2021, the company will actively expand the application of intelligent interactive business in the field of sports and fitness, bringing new growth points for the company. In 2020, the company purchased 3M Company's touch system products and touch display brand Micro Touch in the 2021Q3 market to promote smoothly, promoting the company's revenue growth.
The downstream application field extends, the market demand is exuberant. With the development of the Internet of things, "Industrial 4.0" and smart city construction around the world, the application field of commercial intelligent interactive display products continues to expand, which brings a huge market demand for intelligent interactive display devices. As the construction of smart city has become a global hot spot, the connotation of smart city, such as smart medical treatment, intelligent transportation, intelligent education, smart energy, smart environmental protection, smart building and so on, is developing rapidly. as the basic requirement and module unit of the smart city structure, the Internet of things will usher in a broad market space, and intelligent interactive display devices will usher in a larger market demand.
Profit forecasts and valuation recommendations. In the long run, we are optimistic about the growth opportunities brought about by the smart cockpit layout of the company. We expect the company's 2021E-2023E main business revenue to be 1.5 billion yuan, 1.801 billion yuan and 2.161 billion yuan respectively, with a net profit of 160 million yuan, 196 million yuan and 237 million yuan. Combined with comparable company valuation, 1) PE valuation, give 2021E (PE) 23x-27x valuation, corresponding to reasonable market value range of 36.79-4.318 billion yuan, reasonable value range of 28.74-33.74 yuan. 2) PS valuation, given 2021E (PS) 2.5x-3x valuation, corresponding to reasonable market value range of 37.51-4.501 billion yuan, reasonable value range of 29.31-35.17 yuan. In summary, we think that the corresponding reasonable market value range of the company is 37.51-4.318 billion yuan, and the reasonable value range is 29.31-33.74 yuan. Maintain the "better than the market" rating.
Risk tips: market expansion is not as expected, downstream demand is not as expected.