What happened: the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved revenue of 126.576 billion yuan, an increase of 4.48% over the same period last year, and a net profit of 281 million yuan, down 96.92% from the same period last year. Q3 achieved revenue of 42.015 billion yuan in a single quarter, down 9.98% from the same period last year, and realized net profit of-383 million yuan, down 116.59% from the same period last year.
Promote the optimization of product structure, the leading position of the industry downward cycle is stable. In the first three quarters, TCL Huaxing realized display panel sales area of 32.67 million square meters, an increase of 14.72% over the same period last year. The proportion of non-TV business income such as vehicle and commercial display continued to increase, and the product structure continued to be optimized. Affected by the malaise of the downstream market, prices continued to decline in the early period of the report, and the revenue of the semiconductor display business reached 52.1 billion yuan, down 21.7% from the same period last year. The company is gradually moving closer to achieving the world's leading strategic goals. Large-size 8K120HZ high-end panels, interactive panels and digital signage market share continues to lead the world, 65 and 75 inches global share firmly ranked second, spliced screen market share ranked among the top three in the world. In the field of small and medium-sized sizes, the company accelerated the layout of AR/VR products, further improved the product series, and realized the rapid growth of IT high-end market segments. LTPS flat panel shipments ranked first in the world, LTPS notebook products ranked second, and LTPS vehicle shipments increased significantly. At present, the company has more brand customers, and the first phase of the T4 project has also reached production smoothly. We think that with the price of the 22Q4 panel rebounding across the board, the company's profitability is expected to pick up.
According to the latest Witsview data, TV panel prices have stopped falling across the board in late October, with quotations of all sizes rising by $1. We believe that after several months of production cuts by major panel factories, the current inventory level in the industry has been significantly reduced, the production and price protection measures of major panel manufacturers have achieved phased results, and the signal that the industrial cycle has hit bottom is obvious. Prices are expected to pick up moderately in the fourth quarter (Singles' Day, Qatar World Cup, etc.).
The capacity of semiconductor photovoltaic and materials business expanded smoothly, and the operating performance of Central Semiconductor improved steadily. From January to August in 2022, the domestic market added monthly installed 44.47GW, an increase of 102% over the same period last year. At the same time, due to geopolitics, Russian-Ukrainian conflict, energy shortage and other factors, overseas demand exceeded expectations. Mainland component exports 113.4GW from January to August increased by 81% compared with the same period last year. In this context, TCL Central achieved operating income of 49.84 billion yuan, an increase of 71.35% over the same period last year, and a net profit of 5.49 billion yuan, an increase of 68.94% over the same period last year. The contribution to the company's overall revenue and profit continued to rise. Among them, the overall production capacity of single crystal has reached 128GW, the monthly production capacity of single furnace has reached a new high, and the number of pieces per unit material is significantly ahead of the industry level. At the same time, the company and partners have invested in and started the construction of 100000 tons of granular silicon and silicon-based materials projects and 10,000 tons of electronic-grade polysilicon projects, constantly strengthening strategic coordination with ecological partners and locking upstream core resources.
Investment rating and valuation: we estimate that the company's revenue from 2022 to 2024 will be 1653.87 yuan, 1803.21 yuan and 203.594 billion yuan respectively, the net profit will be 1.79 yuan, 33.83 yuan and 5.871 billion yuan respectively, and the EPS will be 0.01,0.24 yuan and 0.42 yuan respectively.
Risk tips: demand in the lower reaches of the panel continues to slump, the release of new capacity is not as expected, silicon prices fluctuate, and so on.