Core points:
The era of intelligent cockpit 3.0 has begun, and the vehicle screen is becoming the largest dominant increment of the intelligent cockpit. Vehicle display screen is not only the most direct medium of human-vehicle interaction, but also the forefront of cockpit intelligence. in China's newly released passenger cars in 2021, the penetration rates of central color screen and touchable central control screen reached 97.9% and 92.5% respectively.
The car-mounted screen revolution has led to a rise in volume and prices, and the central control and large screen has become the mainstream. The proportion of new energy vehicles with screen control of 12.0 "or more in the Chinese market has reached 48%." With LCD dashboards, HUD and streaming media rearview mirrors and other cockpit products have been loaded on the car, the number of bicycles carrying on the car screen is expected to quickly increase from 1-2 pieces to more than 3 pieces, and the value of a bike is expected to increase from about 1500 yuan to more than 6000 yuan.
The company has focused on on-board display for 25 years, and the leader of the on-board screen revolution has risen abruptly based on its accumulated strength. After being acquired by BOE Group in 2016, the company has become the only vehicle display platform in the group, with full-scene and full-size coverage. According to Omdia statistics, in 2021, the shipments of large-size (≥ 8 ") TFT panels in the car business of BOE remain the first in the world, while the total shipping area ranks first in the world. The vehicle display base in Chengdu has been capped 50 days ahead of schedule. After the project reaches production, it can produce about 14.4 million car screens per year, covering 5-35 inch car display modules. The company is backed by the world-class display leader, the supply chain, 8.5 generation line, capacity transfer of the three major advantages are expected to remain stable.
Horizontal development of intelligent cockpit new display, longitudinally extended vehicle display system business. The company's existing reserves of Mini/Micro LED, Becton Dickinson & Co cell and other new display technology and curved surface, rollable and other new display forms, with new technology to catalyze a new experience. The development of the cabin domain shows the trend of "screen-machine separation", and the relationship of the industrial chain is expected to be reshaped. The company is still based on the role of Tier 2 as a device supplier and has a long-term opportunity to extend its business to on-board display systems and smart cockpit solutions.
Profit Forecast: from 2022 to 2024, it is estimated that the revenue will be HK $13.38 billion and the net profit will be HK $6.9 billion. Give a "recommended" rating.
Risk hints: (1) the risk of competition in the industry; (2) the progress of research and development is not as expected; (3) the risk of driver chip shortage; (4) the risk of recurrent epidemic.