This report is read as follows:

The company is a global leader in display screen, with a significant rebound in performance in 2021, with high certainty in overseas business, domestic channel business, Micro LED and VR business and strong sustainability in 2022.

Main points of investment:

Maintain the "overweight" rating. Considering the suppression of the current epidemic on the demand side of the large screen, we slightly lowered the company's EPS forecast for 2022-2024 to RMB 0.34 (- 0.05,0.42) and 0.50 yuan, with corresponding growth rates of 43%, 24% and 19%, respectively. With reference to the valuation of the industry, we give the company a target of 30 times PE in 2022, corresponding to a share price of 10.2 (- 3.45) yuan.

Performance rebounded significantly, multi-point concerted efforts, strong sustainability of performance. According to the company's annual report for 2021, the annual income was 8.85 billion yuan, + 33.45% compared with the same period last year, and the net profit was 611 million yuan, + 162.56% compared with the same period last year. The annual performance rebounded significantly, mainly due to the rebound in demand for the mitigation of the domestic epidemic in 2022. At the same time, it also benefited from the pick-up in overseas demand, with overseas income in the second half of the year alone + 45% compared with the same period last year. In addition, the company increased the promotion of channel products. Jin Lixiang's newly signed orders for the whole year increased by more than 80% compared with the same period last year, driving domestic distribution revenue by + 53.8% year-on-year. Q4's single-quarter profit is relatively low, mainly affected by the impairment of goodwill. At present, overseas demand continues to pick up, domestic channel business space is large, the company will still strengthen "Liad" and "Jin Lixiang"

At the same time, the company takes the lead in the layout of Micro LED, NP's VR products also have great growth potential, and the company's performance is sustainable.

Capacity expansion will hit the ground and will benefit in 2022. Based on the judgment of the improvement of industry prosperity and concentration, the company's production capacity expanded significantly in 2021, the integration of Shenzhen base was completed, and the production capacity increased by 2400KK/ month; Hunan base capacity climbed rapidly and currently reached 6000kk/ monthly capacity; Lijing capacity reached 800KK/ month in July 2021, and the original plan was to double the production capacity by the end of 2022, but due to the strong demand downstream, the expansion plan may be advanced. As a leader, the company has strong digestion of new production capacity, and capacity expansion is also a strong guarantee for the company's long-term development.

Catalyst: the demand for high-definition display screen is fast.

Risk hint: affected by the epidemic, the company's capacity construction is not up to expectations.