Event: TCL Technology released its 2022 half-year results forecast on the evening of July 14. It is estimated that the operating income will be 840.00-85.5 billion yuan, an increase of 13.00% muri 15.00% over the same period last year, and the net profit is expected to be 6.5-750 million yuan, a decrease of 89.00% muri 90.00% over the same period last year. Corresponding to Q2, the operating income was 434.02-44.902 billion yuan, an increase of 2.85%-6.41% over the same period last year, and the net profit loss was 6.03-703 million yuan.
Semiconductor display business is affected by prices, and the new energy photovoltaic and semiconductor materials industries have grown significantly. Under the influence of international political conflicts and the COVID-19 epidemic, the global economic recovery has slowed down, downstream consumer terminal demand is weak, the semiconductor display industry has not yet come out of the bottom of the cycle, and the prices of major products are significantly lower than the same period last year. The company's semiconductor display business performance fell sharply compared with the same period last year. The company's holding subsidiary TCL Central is expected to achieve revenue of 310-33 billion yuan and net profit of 28.5-3.05 billion yuan in the first half of 2022. The company's G12 wafers continue to maintain the leading edge in scale, technology and efficiency, ranking first in the world in market share. By the end of June 2022, the company's photovoltaic wafer production capacity has increased to 109GW. Despite the short-term pressure on panel prices, the company's new energy photovoltaic and semiconductor materials business benefits from domestic policies to promote distributed installed scale growth, accelerated overseas energy transformation and fab expansion, and we believe that TCL Central will continue the company's revenue growth in the future.
Panel prices gradually stop falling, waiting for terminal demand to pick up. According to the official account of WitsView Wechat, the average price of 32-inch / 43-inch / 55-inch / 65-inch TV panel in late June was $28,55,89,127 per piece, which was $15 per piece lower than that of the previous month. In the first ten days of July, the average price of 32-inch / 43-inch / 55-inch / 65-inch TV panel was $2855any89,124 per piece, and only the price of 65-inch TV panel fell by $3 / piece compared with the previous month. In addition, the price decline of desk monitors and notebook panels in early July was also more moderate than that in June. According to a survey conducted by Trendforce Jibang Consulting, 2022Q1 shipped 47.26 million televisions worldwide, a quarterly decrease of 20 per cent. Mainly affected by the conflict between Russia and Ukraine, crude oil, natural gas and other raw materials rose, coupled with Q1 epidemic control, so that material flow can be blocked, freight skyrocketing. We believe that in previous years, Q3 is the time when brands prepare goods for Black five and Christmas promotions in Europe and the United States. at the same time, Q4 also has consumption seasons such as "Singles Day" in China. With the gradual recovery of demand, panel prices are expected to stop falling and improve the profitability of panel factories.
Continue to add photovoltaic and semiconductor materials. TCL Technology issued the "announcement on Foreign Investment" on July 7. Tianjin silica, a wholly owned subsidiary of the company, plans to sign a "joint venture agreement" in Zhongneng, Jiangsu Province, to jointly invest in the establishment of a new company, Inner Mongolia Xinhuan, to implement about 100000 tons of research and development projects in the production and downstream application fields of comprehensive utilization of granular silicon and silicon-based materials. The registered capital of Inner Mongolia Xinhuan is proposed to be 4.5 billion yuan, while Tianjin silica contributes 1.8 billion yuan and holds 40% of the shares. On the one hand, this cooperation strengthens the company's strategic leadership in the new energy photovoltaic and semiconductor materials industry, and on the other hand, strengthens the coordination of upstream and downstream resources, so as to climb the production capacity of new energy photovoltaic products in the future. and expand product market share to lay a good foundation.
Profit forecast and investment rating. We estimate that the operating income of the company in 2022-2024 will be 1792.140.2096.42 billion yuan respectively, and the 2022-2024 net profit of the company will be 56.40 billion yuan 8239pm and 10.779 billion yuan respectively, and the corresponding value will be 0.40 pound 0.59 pound 0.77 yuan per share respectively. With reference to the valuation of comparable companies in the industry, based on the PE valuation method, we give the company 2022 PE 9-10x, corresponding to the reasonable value range of 3.62-4.02 yuan per share, and based on the PS valuation method, we give the company 2022 PS 0.5-0.6x, corresponding to the reasonable value range of 6.39-7.66 yuan per share. Combining the two valuation methods, we believe that the reasonable value range of the company is 5.00-5.84 yuan per share, maintaining a "better than the market" rating.
Risk tips: LCD downstream market and mobile phone terminal market demand fluctuations; photovoltaic product demand is not as expected; the company's production line capacity release progress is not as expected.