Event Overview

The company announced that its operating income is expected to be 161.6 billion yuan to 165 billion yuan in 2021, an increase of 111% to 115% over the same period last year. It is expected to realize a net profit of 10 billion yuan to 10.3 billion yuan, an increase of 128% to 135% over the same period last year.

Analysis and judgment:

Large-size panel prices continue to fall, the company's single-quarter profit pressure is expected to be 2021, the company's semiconductor business revenue growth of more than 80% year-on-year, net profit growth of more than 33% year-on-year.

The operating income of the large-size business increased by more than 90% compared with the same period last year, and the net profit increased by more than 300%. T1, T2 and T6 remained full sales and production, T7 was mass produced as planned, T10 production lines and products were accelerated, and the shipping area of large sizes increased by 36% compared with the same period last year. Due to the logistics response and the adjustment of demand in some regions, the prices of major products continued to be adjusted back for two quarters, but the average price during the reporting period was still significantly higher than that in the same period last year.

Small and medium-sized enterprises have achieved a year-on-year increase in business income of more than 30%, and operating efficiency is gradually improving. T3 product and customer structure are continuously optimized and profitability is improved; T4 flexible OLED production line phase II and phase III production capacity construction is steadily advanced, product technology and customer structure have been improved; high value-added IT display T9 and T5 located in vehicles, AR/VR and other products are built according to plan, the company will continue to promote small and medium-sized business strategy, optimize benefit structure and achieve sustainable growth.

Under the guidance of the high-end business strategy of TV and Shangxian products, the company's long-term profitability is expected to stabilize in 2021 under the influence of Q4 seasonal off-season, the company continues to decline under the influence of seasonal off-season, the company promotes the high-end business strategy of TV and Shangxian products through continuous product structure optimization and acceleration of small and medium-sized layout, and the company's long-term profitability is expected to be balanced and stable.

The semiconductor photovoltaic and materials business became the company's second growth engine Central shares merged in the fourth quarter of 2020, becoming a new driver of the company's performance growth in 2021. According to the 2021 performance forecast of Central shares, the revenue reached 40 billion yuan to 42 billion yuan, an increase of 109.90% to 120.39% over the same period last year, and the net profit of returning home was about 3.8 billion yuan to 4.2 billion yuan, an increase of 248.95% and 285.68% over the same period last year. The production capacity of photovoltaic materials has increased rapidly, especially the technical, cost and ecological advantages of G12 products; the 8-12-inch product structure of semiconductor materials business continues to upgrade, and Central Semiconductor has exceeded its performance doubling plan.

Investment suggestion

Affected by the uncertainty of the overseas epidemic situation and shipping, the price of the panel industry continues to decline, and the company's gross profit margin is under greater pressure. in addition, the company's Suzhou three-star line and table production capacity climb faster, and the table income growth exceeds the previous forecast, so the company's operating income growth forecast is raised, and the company's profit growth forecast is lowered. It is estimated that the company's revenue in 21-23 will be raised from 1295.2 Universe 154.434 billion to 163.52 1818.8 EPS 206.25 billion. It is estimated that in 21-23, the EPS will be downgraded from 0.87 to 0.80, with the corresponding current price PE being 10.7, 9.67 and 7.95 times, respectively. The company continues to be optimistic about the improvement of the industry's long-term competition pattern and the enhancement of the strategic value of the industry chain in 21-23. The company is optimistic about the improvement of the long-term competition pattern of the industry and the enhancement of the strategic value of the industrial chain. Maintain the company's "buy" rating.

Risk hint

Panel price instability and panel price recovery period of unpredictable risk; panel price rise and fall and the company's overall revenue and profitability is highly related, the late panel price adjustment is too large, resulting in the company's performance is lower than expected; advanced display technology rapid commercial use, LCD panel production capacity is eliminated prematurely; systemic risk brings a sharp decline in the share price of Central shares.