Event: on August 20, 2022, the company released its semi-annual report 2022. In the first half of 2022, the company achieved operating income of 3.702 billion yuan, an increase of 2.80% over the same period last year, and a net profit of 268 million yuan, down 6.02% from the same period last year. Corresponding to 2022Q2, the company achieved an operating income of 1.94 billion yuan in a single quarter, down 8.09% from the same period last year, and a net profit of 153 million yuan in a single quarter, down 15.65% from the same period last year.
Domestic business Q2 was affected by the epidemic, and the demand growth rate of overseas industry returned. In the first half of 2022, the company's domestic operating income was 2.4 billion yuan, accounting for 64.84%, down 9.60% from the same period last year. January-March domestic industry market demand continued to grow at a high rate in 2021. Orders affected by the epidemic declined in April-May and began to recover gradually in June after the epidemic in Shanghai was stable. In addition, as the revenue of night travel decreased sharply compared with the same period last year, the domestic operating income decreased compared with the same period last year. The company's overseas operating income was 1.301 billion yuan, accounting for 35.16%, an increase of 37.59% over the same period last year. Since the epidemic was stable in May 2021, the demand growth rate of the overseas industry has returned.
New Micro LED products are released and large-scale applications are launched. According to Liad's official account, on June 30, 2022, Liad held a global press conference on new technologies and new products of "Micro LED stepping into General display to meet the advent of the semiconductor era" and released the series of Micro LED technology and new products of "Liad Black Diamond". Liad Black Diamond products cover new P0.9-P1.8 products and N in 1 Micro LED display products below P1.0, covering 80% indoor small spacing products. With the further maturity of Liad's Micro LED chip application technology, the mass transfer yield of Liad has been greatly improved, the PCB-based mass yield has increased to 99.995%, and the semiconductor-level transfer yield has reached 99.999%. We believe that with Liad's investment in COG, quantum dots and other technologies, the cost of products is expected to be greatly reduced in the future. As of August 20, 2022, the company has added 150 million yuan of new Micro LED orders in 2022.
Strengthen the expansion of overseas markets and intelligently show that the development of new markets is smooth. With the optimization of the performance-to-price ratio of small spacing, Liad successfully pushed small spacing into the sinking market through the Jin Lixiang brand, so the company entered the Asian, African and Latin American market. The company's Asian, African and Latin American team signed a contract of about 210 million yuan in the first half of 2022, an increase of 19% over 2021. The growth rate is expected to increase after the completion of the market layout in the second half of the year. In addition, the company's LED all-in-one revenue is growing rapidly compared with the same period last year.
Profit forecast and investment rating. We estimate that the operating income of the company in 2022-2024 will be 94.03x11425max RMB 13.906 billion, the net return profit of the company in 2022-2024 will be 759pm 950pm RMB 1.84 billion, and the corresponding EPS in 2022-2024 will be 0.30pm 0.37pm 0.47 yuan per share respectively.
Based on the PE valuation method, we give the company a valuation of 25-27 X PE in 2022, and we believe that the reasonable value range of the company is 7.46-8.06 yuan per share, with a "better than the market" rating.
Risk tips: increased competition in the industry; Mini/Micro LED penetration is not as expected; the epidemic continues to worsen.