A domestic advanced micro-nano structure product manufacturer and technical service provider, established in 2001 and listed on the GEM in 2012. The company developed its own key manufacturing equipment for micro-nano optics, the lithography machine, and established a basic technology platform system for micro-nano optics R&D and manufacturing. It expanded product types through technology R&D+mergers and acquisitions to achieve steady growth in sales scale. However, due to factors such as new product development+marketing, profitability fluctuated greatly. In 2016-2020, the company's sales revenue CAGR was 35.3%, and Guimu's net profit CAGR was 13.7%.
It has the ability to self-manufacture the core equipment of the lithography machine+micro-nano structure design capability+the ability to integrate and innovate the entire material/device application industry chain. It runs through the application innovation model from the bottom up, the business logic is clear, and the technical platform advantages are remarkable. The company currently has four major product business groups: high-end intelligent equipment+public safety and new printing materials+reflective materials+new consumer electronics materials. There are no problems with self-development of core equipment, and the product matrix is diverse. However, with the advantages of the micro-nano technology platform, the product range has not been expanded to products such as microtransparent under-screen fingerprints, AMOLED precision metal-mask FMMs, AR glasses, optical waveguide lenses, holographic light field 3D displays, etc., further enhancing the competitiveness and profitability of the company's products.
Reflective materials benefit from domestic replacement of microprism reflective films+increased penetration rate of new energy vehicles and expansion of license plate film market space. Hua Risheng, the main product of reflective materials business, is reflective film, which leads the industry in terms of sales scale and profitability. The high-end product microprism reflective film was completed and put into production in 19 and is currently in the market promotion stage, which is expected to accelerate the import and replacement of high-end microprism reflective films in China. The unit price of new energy license plate film is higher (40-50% higher than traditional vehicles) +higher profitability (gross margin is 60-70%). Benefiting from the increased penetration rate of new energy vehicles and the expansion of license plate film market space, the company is expected to quickly upgrade the product structure with the advantageous position of car film to provide performance flexibility.
New display materials benefit from LCD production capacity transfer+company capacity expansion+product upstream expansion.
There is a clear trend of LCD panel production capacity shifting to mainland China. Domestic manufacturers have strengthened their dominance, and domestic light guide board manufacturers have gained growth opportunities in the context of industrial transfer. The company plans to increase the production capacity of notebook/TV-type light guide panels (adding 28.32 million pieces per month, with a production expansion ratio of 81.85%) +extending upstream raw materials. With high-quality customer resources, the absorption of the new production capacity is guaranteed, contributing to future performance growth points.
It has the core mass production capacity of AR diffraction optical waveguides, the core optical components of AR equipment, technological breakthroughs+industry chain cooperation, and enjoys the rapid growth dividends of the AR industry. Technology giants led by Meta have entered the market, and the construction of the metaverse industry ecosystem is expected to accelerate. AR/VR is an important physical interface between reality and virtual reality, and a hardware interface for the implementation of the metaverse. AR devices are currently sold at high prices and sales are low, and the consumer market has not yet opened up great potential for growth. With the advantage of the technology platform, the company already has mass production capacity for AR nano-optical waveguides, and the joint venture with Gaowei Electronics is expected to accelerate large-scale mass production capacity of related products and enjoy the dividends of the rapid growth of the AR industry.
Investment advice: The company's sales revenue for 21/22 is estimated to be 18.6/2.49 billion yuan, and the net profit returned to the mother is 1010/249 million yuan, giving the company 50 times PE for 22 years. The corresponding target price is 48 yuan/share, covering the “buy” rating for the first time.
Risk warning: downstream demand falls short of expectations, competition in reflective materials and light guide plate materials markets is fierce, company share is lost, profitability is declining, AR equipment sales fall short of expectations, mass production of AR optical waveguide lenses falls short of expectations, and technology research and development progress falls short of expectations