Main points of investment:
Mini/Micro LED new technology has become a strong engine of LED display market growth, the company pre-emptively layout new technology, open a new breakthrough in profitability. Mini/Micro LED has advantages in performance, service life and cost, and the penetration trend will be irresistible in the future. The company focuses on the layout of Mini/MicroLED, and recently released a series of new MicroLED display products such as "THE GREAT SPACE" and "black diamond", demonstrating the world's leading technology. Yidu data predicts that the CAGR of China's Mini LED backlight module market will be 46% in the next five years. With technological breakthroughs and market outbreaks, the company will give priority to the benefits of industry development.
Vertical integrated layout of the industrial chain to improve the company's core competitiveness. In recent years, the company continues to expand the industrial layout by means of investment and joint ventures, forming full coverage of the upstream, middle and downstream, ensuring upstream supply, controlling costs, and improving the company's core competitiveness. The company jointly established the world's first large-scale mass production base of Micro LED, Lijing, and took a stake in the American Seafords chip company to achieve full coverage of the industrial chain.
With the harmony of the time, the earth and the people, Liad took a ride on the development ride. The normalization of the epidemic is gradually advancing, and LED shows that the market demand has been released. At the same time, the epidemic led to increased industry concentration, industry CR10 in 2021 increased by 4.2% compared with 2019, the company benefited from excellent anti-risk ability and core competitiveness, the industry leading position has been consolidated. The "double carbon" strategy endows the industry with favorable policies. Liad became the "lucky guy" of the times.
Earnings Forecast: we forecast that the company's earnings per share in 22-24 will be 0.31, 0.53, 0.71 respectively. According to comparable companies Lehman Optoelectronics, Changyang Technology and Zhouming Technology, with reference to the average price-to-earnings ratio of LED comparable companies from 2022 to 2024, and considering the rising market share of Liad as an industry leader, Liad is valued at 28 times in 2022, corresponding to a target price of 8.68 yuan per share. Cover for the first time, giving a "buy" rating.
Risk hints: Micro LED technology progress is not as expected, chip supply is not as expected, exchange rate risk, entity list risk.