Event: the company issued a 2022 performance forecast. The company expects to achieve a net profit of-350 million yuan to-280 million yuan in 2022, down 1202.91% to 942.33% over the same period last year, and to deduct the non-return net profit from-340 million yuan to-270 million yuan. The company's Q4 net profit is expected to be-316 million yuan to-246 million yuan in 2022, down 1464.94% to 1117.69% from the same period last year, and 813.45% to 610.76% from the previous month.

Light to cover impairment losses, glass-based MiniLED achieves a breakthrough in production from 0 to 1: the company makes a comprehensive inventory of all kinds of inventory, receivables, fixed assets, projects under construction, intangible assets and other assets at the end of 2022, and in line with the principle of prudence, the company prepares for impairment of related assets that may have impairment losses. Among them: the provision for impairment of goodwill related assets of Watka (mainly engaged in glass substrate cutting business) is about 38 million yuan. The provision for impairment of fixed assets related to traditional business is estimated to be about 110 million yuan, and the provision for impairment of projects under construction is estimated to be about 57 million yuan. Annual provision for impairment of accounts receivable and inventory is expected to be about 21 million yuan, of which the provision for impairment of inventory and credit is about 5 million yuan, and the credit impairment loss for accounts receivable is about 16 million yuan. In terms of cost, the company has increased its R & D investment in the areas of MLED backlight and direct display. The R & D expenditure is expected to increase by about 30 million yuan over the same period last year. In addition, the impact of non-recurrent profit and loss is 17 million yuan, which is to accelerate the calculation of the cost of two periods of equity incentive (the scheme has been terminated). At present, the company has successfully released a full set of 34-inch 1152 partition 0OD glass-based MLED backlight ultra-thin display solutions, and achieved the coordination of upstream and downstream industries, completing a breakthrough in the production application of glass-based MLED backlight from 0 to 1.

The company MLED has successfully entered the field of vehicle and medical treatment. In addition, the company's glass-based products in MLED direct display and semiconductor packaging substrate and other new product application development is progressing smoothly, the company will continue to promote Jiangxi Dehong display glass substrate production project and Hubei Tongge microchip board-level packaging carrier board industrial park project construction progress, speed up its capacity put into progress, the smooth mass production of the above projects is expected to have a positive impact on the company's performance.

The MiniLED backlight market is expected to accelerate, and the release of new glass-based products is becoming more and more hot: according to Arizton, the global MiniLED market is expected to increase from US $150 million to US $2.32 billion in 2021-2024, with an annual growth rate of more than 140%. In 2020, the market size of China's MiniLED industry was 4.17 billion yuan, an increase of 139.8% over the same period last year. With the continuous development of the industry, the market size is expected to exceed 40 billion yuan in 2026. In 2022, BOE, Hisense and other industry leading companies continue to layout the MiniLED track. Among them, BOE's stake in Huacan Optoelectronics is aimed at realizing the integration of the MLED industry chain. Hisense plans to increase its stake in Qianzhao Optoelectronics Company and finally gain control. At the 2023 CES exhibition, the global technology giants Samsung, TCL, Sony Group Corp, Volkswagen and BMW all released the latest Mini/MicroLED applications in 2023. The giant's continuous expansion of MiniLED product categories and accelerated integration of industrial resources show a consensus on the development of the display industry, and MiniLED has gradually become the main track for hardware upgrading in the display industry. The glass-based MiniLED products will also be unveiled at the 2023 CES exhibition. The promotion of benchmark enterprises represented by BOE, Tianma and Lenovo is expected to push the glass-based MiniLED permeability to a new level.

Deep ploughing optoelectronic field, code layout IC carrier board: as an important material of chip packaging, chip packaging carrier board is developing rapidly with the increasing demand in downstream application fields. According to Prismark, the global output value of carrier plates is expected to rise to 16.19 billion US dollars by 2025. As the leading enterprise of traditional optoelectronic glass finishing, the company has overcome the technical difficulties in glass-based chip board-level packaging carrier board. the company has industry-leading glass thinning, TGV (glass through hole), sputtering copper and microcircuit graphics technology, and has the ability of glass-based huge micron through holes, with a minimum aperture of 10 μ m and a thinnest thickness of 0.15-0.2mm. It is one of the few manufacturers mastering TGV technology in the world. The company and Tianmen Hi-tech Investment jointly funded the establishment of a joint venture company Hubei Tonggewei to invest in the construction of chip board-level packaging carrier board industry park project, which can be used in MIP packaging of MicroLED display.

Hubei Tongge Micro Co., Ltd. and its chip board package carrier board project are progressing smoothly and are expected to become a new engine of revenue growth in the future.

Maintain the "buy" rating: the company steadily promotes the development of MiniLED backlit industry chain, consolidates the company's industrial chain position in the glass-based MiniLED field, and continues to strengthen its advantages in the field. As the leading enterprise of traditional optoelectronic glass finishing, the company has overcome the technical difficulties in the glass-based chip board-level packaging carrier board, and the glass-based chip-level packaging carrier board has a broad prospect and is expected to become a new boost to the company's revenue growth. In the future, the company is expected to fully benefit from the outbreak of MiniLED applications and the growth of demand for glass-based chip board-level packaging, so as to enhance profitability and the status of the industry chain. It is estimated that the return net profit of the company from 2022 to 2024 is-312, 0.40 and 0.92 yuan, respectively, and the EPS is-2.55, 0.32 and 0.92 yuan, respectively, and the corresponding PE for 23 / 24 is 63x and 22x, respectively.

Risk hint: the risk of fierce competition in the market, the risk of product price fluctuation, the risk of Mini LED glass-based expansion not as expected, the risk of brain drain, the risk of technology.