Content summary:
Integrated manufacturer of touch display. The company's traditional business is liquid crystal display module, which cut into the touch screen industry chain in 2011. Different from other domestic touch screen manufacturers, the company takes the touch display integration route, including cover glass, CTP sensor, CTP module, LCM touch display integration production capacity. The integrated production of touch display enables the company to quickly provide corresponding product solutions according to the customized needs of customers, and is also conducive to the overall coordination of production. The integration of touch and display also adapts to the future purchasing direction of terminal manufacturers and has the advantage of first-mover.
Smart terminal products continue to sell well, and the touch screen market continues to grow. In 2013, smartphone penetration continued to rise and showed a large screen trend; tablet shipments will continue to grow at a high speed and are expected to surpass notebook shipments; with the joint efforts of all parties, ultrabooks are expected to have an explosive period in 13 years, and the penetration rate of ultrabooks with touch functions is rising rapidly. In 2013, the touch screen market will continue to maintain high growth, and show a large screen trend, OGS technology solutions adapt to large screen applications, the company's OGS yield continues to rise, and will expand OGS production capacity. Under the current situation that the supply of OGS capacity exceeds the demand, it will usher in a good opportunity for development.
Profitability continues to improve. After the climbing period in 2012, the company's current capacity utilization and product yield have been greatly improved, and the R & D process has also begun to accelerate. It is expected that in 2013, with the introduction of new customers and the delivery of terminal manufacturers' products, the company's capacity utilization and product yield will continue to rise, the level of gross profit margin will also gradually pick up, and the company's profitability will continue to improve. According to the forecast of the company's performance in the first quarter of 2013, it will turn losses into profits in the first quarter, and the net profit attributed to shareholders of listed companies is expected to be 20-3 million yuan.
Profit forecast and valuation: the company's EPS from 2013 to 2014 is expected to be 0.75 yuan and 1.04 yuan respectively, corresponding to 24x and 17x PE respectively. The company suffered a serious performance loss in 2012, mainly due to low capacity utilization and product yield during the capacity release process. By the end of 2012, the company's capacity utilization and product yield had been greatly improved, and profitability had been restored. under the premise that the touchscreen industry continues to improve, the company's performance is expected to reverse, we give the company a "overweight" rating.
Risk factors: the risk of technological change; shipments of smartphones, tablets and touch ultrabooks fall short of expectations; and the yield of the company's products climbs slowly.