Event: according to the company's quarterly report for 2022, 2022Q1 achieved a revenue of 291 million yuan, an increase of 28.65% over the same period last year, a decrease of 23.42%, and a net profit of 8.0128 million yuan, an increase of 105.35% and an increase of 241.26% over the same period last year.
2022Q1 revenue is growing high compared with the same period last year, and domestic and foreign markets are constantly expanding: in the domestic market, the company continues to increase domestic market coverage, optimize the organizational structure and management of domestic business, innovate marketing mix strategies, and supplement and strengthen regional sales force. however, due to repeated epidemic situations in local areas, some factories in the upper and lower reaches of the industrial chain are shut down periodically, and logistics and transportation is restricted from time to time. The development, bidding and construction of some domestic projects have been delayed, resulting in domestic business performance under pressure in the first quarter. In the overseas market, the downstream demand is steadily increasing, and the company continues to consolidate and expand the existing overseas marketing network, extend overseas product lines, and expand overseas market share. The total revenue in the international market is 223 million yuan, an increase of 60.29% over the same period last year. Among them, the international display business increased by 77.48%, and the international lighting business increased by 43.08%. Become an important engine of the company's Q1 performance growth.
Set to increase the speed of COB production expansion, help the company's long-term development: the company plans to raise an additional capital of 689 million yuan, mainly for COB ultra-high-definition display reconstruction and expansion projects and supplementary liquidity. The total investment of the project is 540 million yuan, and the construction period is 24 months. the project is put into production from T1 and is expected to reach 12% in that year and all in T5 years. After full production, the annual income is expected to be about 1.147 billion yuan, and the after-tax internal rate of return on project investment is 16.07%. By raising funds to expand the production capacity of COB display products, the company will increase the proportion of COB products with high gross margins, and the product structure will be further optimized. In addition, with the increase in the production capacity of the company's COB products, economies of scale and supply capacity will be further improved, and the market share in small spacing LED is expected to further increase, continuing to consolidate LED's leading position in the industry.
Small spacing LED display has entered a period of rapid growth, and COB display market share is expected to continue to increase: at present, small spacing LED display products are in a period of rapid development, which is expected to continue to drive the growth of LED display market scale. According to Oweyun data, from 2019 to 2021, the domestic market size of small spacing LED displays was 10.37 billion yuan / 11.8 billion yuan / 18.15 billion yuan respectively, with a year-on-year growth rate of 55.2% 13.79% and 53.90% respectively. According to OviCloud, revenue from small-spacing products with point spacing of 2.5mm-2.1mm fell 4.9% year-on-year in 2019, while small-spacing products with point spacing of 1.4mm-1.2mm increased by 64.2% year on year. In the micro-pitch display market below P1.0, COB is one of the core technical routes, the display effect and cost advantages are gradually emerging, and the market share of small-spacing LED display screen is also gradually increasing. The company is leading in COB technology and is expected to continue to benefit from the expansion of the small spacing display market.
Maintain the "buy" rating: we are optimistic that the company will continue to take the lead in COB technology. With the acceleration of market penetration in the future, COB packaging under P1.0 is expected to become the mainstream development direction in the future, and the company has obvious first-mover advantages. It is estimated that the return net profit of the company from 2022 to 2024 is 136 million yuan, and the EPS is 0.20, 0.29 and 0.39 yuan, respectively, corresponding to PE 34X, 23x and 17X respectively.
Risk hint: market demand is not as expected, small spacing LED screen penetration is not as expected, production capacity climbing is not as expected, and the company's product promotion progress is not as expected.