Event: on March 5, 2022, the company released its 2021 results, KuaiBao. In 2021, the company is expected to achieve operating income of 2.371 billion yuan, an increase of 0.86% over the same period last year, and its net profit is expected to be 272 million yuan, down 10.93% from the same period last year. The market for the company's traditional products is under great pressure in 2021, which leads to a decline in the comprehensive gross profit margin. However, the company's automotive LED and Mini LED and other new products business growth is rapid, providing a strong support for the company's performance.
Mini LED application market is broad, the company actively layout new products. Affected by the spread of the global epidemic and the economic environment, the market demand for Mini LED has not been fully started at present, but there is a broad market space for downstream applications. According to the record table of the company's investor relations activities on November 4, it is expected that there will be a greater market performance in 2022. With the continuous introduction of new Mini LED products by well-known enterprises at home and abroad, the popularity of Mini LED products is increasing, and consumers' recognition of Mini LED products is getting higher and higher. A large amount of capital and many companies have entered this field, which makes the competition in the early stage more fierce. But first of all, the advantage of the company lies in the high overlap between Mini LED customers and traditional product customers, and the stickiness of cooperating with the company for many years. Secondly, the company has always paid attention to technological innovation and the stability of product performance. In order to cope with the development and expansion of new products, the company has abundant funds. We believe that the company is expected to gain a higher market share in the period of rapid growth of Mini LED products.
The performance of automotive LED is outstanding, which has become a new driver of performance growth. The company's automotive backlight LED has been used in instruments and central control of domestic and many joint venture brands, and has entered the global supply chain, and automotive lighting LED has entered the supply chain of GAC, BYD, Jianghuai, Chery and other mainframe factories. With the rise of new energy vehicles and the application of LED with a strong sense of science and technology, the overall vehicle LED consumption continues to increase significantly. As of September 2021, more large terminal manufacturers have taken the initiative to find domestic LED packaging factories for cooperation.
We believe that the company is expected to usher in a larger growth space of the market segment.
Profit forecast and investment rating. The company has increased the construction of R & D platforms in the three places, and invested more in R & D of new products and new technologies, which has laid a solid foundation for the company's future performance growth. We estimate that the operating income of the company in 2021-2023 is 2.371-2.883 billion yuan respectively, and the net profit of returning to the parent in 2021-2023 is 2.72 million 344 million, respectively, and the corresponding EPS in 2021-2023 is 0.20, 0.26 and 0.34 yuan per share respectively. Based on the PE valuation method, we give the company a valuation of 25-27X PE in 2022, and we believe that the reasonable value range of the company is 6.41-6.92 yuan per share, which is rated as "better than the market".
Risk hint: industry competition intensifies; Mini LED penetration falls short of expectations; epidemic situation continues to worsen