Event: on October 22, 2022, the company released its third quarterly report in 2022. In the first three quarters, the company achieved operating income of 5.773 billion yuan, down 1.05% from the same period last year, and realized a net profit of 432 million yuan, down 17.07% from the same period last year. From the 2022Q3 single quarter point of view, operating income, net profit, operating cash flow continued to grow quarter by quarter.
LED industry leader, continue to promote the development of Micro LED. According to the data quoted by Futuresource Consulting in the company's third quarterly report, up to September 2022, the company has been ranked first in global LED display products market share for six consecutive years, small spacing products first in market share, and indoor LED products in first place. As the leader of the industry, the company continues to carry out technical investment and industrial chain cooperation around Micro LED. In the future, the company will reduce product costs, expand the market scale and extend to smaller applications on the basis of the existing large screen display.
Smart display orders are growing steadily month-on-month, and black diamond series are shipped one after another. The company's smart display business achieved revenue of 4.921 billion yuan in the first three quarters of 2022, an increase of 8.47 percent over the same period last year. Among them, smart shows that overseas income increased by 42.04% over the same period last year, 43.30% in Europe and the United States, and 36.49% in Asia, Africa and Latin America, accounting for an increase in 2pct. Domestic revenue fell slightly year-on-year, accounting for 62%. As of October 17, the newly signed order of Micro LED is about 300 million yuan, of which the black diamond series company officially put into production in September and began to ship in October, reaching 40 million yuan by October 17.
With the rapid growth of virtual reality business, the layout of meta-universe industry chain is becoming more and more abundant. In the first three quarters of 2022, the company's virtual reality business achieved revenue of 273 million yuan, an increase of 23.17% over the same period last year, and a gross profit margin of 70.23%.
What the company has is the world's leading optical motion capture technology, and optical motion capture technology is the underlying technology of meta-cosmic applications. After the acquisition of American NP in 2017, on the one hand, the company expanded the sales of its hardware products at home and abroad, on the other hand, it explored industry solutions and accumulated digital assets around its hardware through the newly established virtual moving point company in China. The layout of Liad in the meta-cosmic industry chain is becoming more and more abundant, and it now covers four layers, including infrastructure, human-computer interaction, creator economy and experience. The company will participate in meta-universe through input, output, platform tools and application scenarios, and gradually upgrade and improve the virtual intelligent interaction system from display equipment, dynamic capture technology, digital human production platform and other related technology fields. to promote the innovation and development of meta-universe.
Profit forecast and investment rating. We estimate that the operating income of the company in 2022-2024 will be 89.15 pounds 10826 pounds 13.17 billion yuan respectively, and the net profit of 2022-2024 will be 674 million pounds 823 pounds per share, respectively, and the corresponding EPS in 2022-2024 will be 0.26 pounds 0.32 pounds per share.
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 6.62-7.15 yuan per share, which is rated as "better than the market".
Risk tips: increased competition in the industry; Mini/Micro LED penetration is not as expected; the epidemic continues to worsen.
