Jingdian Jingdian is a veteran manufacturer of on-board display panels. Jingdian, formerly known as Jingdian International, which was founded in 1978, has been committed to vehicle display business since 1997. After BOE subscribed in 2016, BOE Jingdian became the only vehicle product platform controlled by BOE Group.
In terms of on-board display, the company focuses on promoting the three-step strategy of "display device, display system and intelligent cockpit", among which 1) display devices contribute to core revenue, 2) display system starts mass production and loading, and 3) intelligent cockpit business is a long-term goal. In 2021, the company's revenue was about HK $7.7 billion, an increase of 71% over the same period last year, of which 1) vehicle display accounted for 84% and industrial display accounted for 16%. 2) domestic income accounted for 65% and international income accounted for 35%. The company realized a net profit of HK $328 million in 2021, with a net profit margin of about 4.2 per cent.
In the era of smart cars, multi-screen and large-screen has become a trend. From the triple screen of SAIC Feifan R7 to the ideal ONE quadruple screen, from the 15.6inch central control large screen of BYD series models to the 27-inch integrated sliding screen of Roewe RX5, with the promotion of electrification and intelligence in the automotive industry, the innovative trends such as multi-screen and large screen of cockpit display are becoming more and more obvious.
According to the statistics of Sigmaintell, the global shipments of vehicle display panels will reach 135 million in 2020, 164 million in 2021 and 226 million in 2025. We expect that with the increase in shipments and the increase in the proportion of large panels, the global on-board display screen size is expected to increase from $7.2 billion in 2020 to $12.8 billion in 2025.
Card position is accurate, back to the group, BOE Jingdian opened the road of "Baping". Jingfang Jingdian in the car shows that the market share of the track continues to jump. According to Omdia statistics, by 2021, the company's vehicle TFT shipping area leapt to the first place in the world, and the TFT shipment volume of more than 8 inches remained the first in the world.
The rapid improvement of the company's market position, 1) from the point of view of demand, the card is located in the Chinese market, enjoying the high demand of large screen and multi-screen under the trend of electric intelligence, and 2) from the supply point of view, relying on BOE Group, on the one hand, sufficient production capacity, 8.5 generation line highlights the advantage of large size, on the other hand, technology leadership, all kinds of innovation continue to launch, on the other hand, the brand is strong, upstream resources and downstream customer base is extensive.
The target price is HK $20, covering the "buy" rating for the first time. We estimate that the total revenue of Jingdong Jingdian from 2022 to 2025 will be about HK $101x131max 166max, an increase of 31%, 29%, 27%, 23%, and a net profit of about 5.2%, 7.7%, 1.28 billion, and an increase of 59%, 38%, 35%, 31%, respectively. Based on 20x 2023eP/E, we gave 710.HK a target price of HK $20, covering the "buy" rating for the first time.
We are optimistic that the multi-screen, large-screen and other innovative trends of the cockpit display will continue to advance. We expect BOE Jingdian to be the "bully screen" on the car that benefits from this trend.
Risk hint: the demand of large screen and multi-screen is lower than expected, the competition of track is higher than expected, and the price of panel market is lower than expected or the cost is higher than expected.