What happened: the company released a report for the third quarter of 2022, the company's main income in the first three quarters of 22 was 1.669 billion yuan, up 16.69% from the same period last year; the net profit was 305 million yuan, up 12.5% from the same period last year; and 280 million yuan was deducted from non-net profit, up 10.16% from the same period last year.
22Q3's revenue is nearly flat compared with the same period last year, and its profitability is good: the company's 22Q3 revenue is 566 million yuan, year-on-year-3.07%, net profit 133 million yuan, year-on-year + 2.54%, gross profit 56.56%, year-on-year + 0.81pct, net profit 23.53%, year-on-year + 1.29pct. The company's Q3 revenue and return net profit are nearly flat compared with the same period last year, and the overall profitability maintains a high level. Q3 revenue growth slowed significantly compared with the first half of the year, mainly due to delayed revenue recognition of Micro OLED products, falling demand from Android phones and pressure on the semiconductor closed testing industry. From the cost point of view, the 22Q3 management fee of 80 million yuan, nearly doubled compared with the same period last year, mainly due to the provision of one-time excess performance reward fees to Ollitone. Financial expenses-36 million yuan, down 32 million yuan from last year, mainly benefiting from the devaluation of the RMB.
Leading companies have joined one after another, and Micro OLED is expected to benefit deeply from the development of virtual reality: according to Digitimes, Apple Inc will release MR products next year and is expected to use Micro OLED screens. In addition, Samsung and LG show that they are planning to build a Micro OLED production line with the goal of mass production by 2024, according to Korean media Chosun Ilbo. Among domestic manufacturers, according to OLED Industry, Vision Technology has been laying out Micro OLED since 2017, with a total investment of 2.4 billion yuan to build a production line with an annual production capacity of 2000 million silicon-based OLED devices (corresponding to 9000 monthly production capacity of 12-inch silicon wafers). BOE and Ored Optoelectronics jointly invested 1.15 billion yuan in Yunnan to build a Micro OLED production line in Kunming, Yunnan. TCL Huaxing plans to invest 250 million yuan to build an 8-inch silicon-based OLED micro-display production line. MicroOLED technology attaches OLED to silicon wafers to achieve ultra-high resolution, which is the most suitable technology for AR/VR near-eye display, and is expected to benefit from virtual reality discovery. The company is the world's leading screen testing equipment manufacturers, Micro OLED testing equipment layout industry-leading, related products have been downstream international well-known CMOS chip manufacturers and consumer electronics manufacturers to verify, is cooperating with downstream customers for the follow-up product mass production of pre-R & D trial, the future is expected to fully benefit the popularity of Micro OLED in AR/VR/MR applications.
Investment advice: we estimate that Huaxingyuan's 2022-2024 income will be 2.331 billion, 3.222 billion and 4.234 billion respectively, and its net profit will be 336 million, 570 million and 820 million respectively, maintaining the "Buy-A" investment rating.
Risk tips: customer expansion is not as expected, downstream demand is not as expected, domestic substitution is not as expected.