The proportion of the company's car screen continues to increase, and automotive electronics will become the main growth momentum in the future. Demand side: the electronic degree of the car is increasing year by year, and the trend of multi-screen / large screen makes the market price and quantity of the vehicle screen rise. Supply side: LCD display production capacity moves to the mainland, import substitution is good for domestic manufacturers. The company plus vehicle display screen, double fifth-generation line is under construction, half of the production capacity will be used for on-board display, a good customer base, orders will be quickly released after production, optimistic about the good growth of the company. At the same time, the industrial medical Internet of things products will grow rapidly in the future.
3D sensing penetration will continue to increase. The company has excellent technology and strong profitability in the future. We believe that 3D cameras will become the ultimate camera products, the company's two-way layout of structured light and TOF, but also with manufacturers to provide other 2.5D solutions. The company has cooperated with Qualcomm Inc and Himax for many years, and began to gradually introduce equipment to release production capacity, which is expected to prepare for the 3D sensing of XIAOMI and Oppo. In terms of double photography, the company has cooperated with large domestic mobile phone manufacturers to ship goods, and the yield is high, and the income of double photography will increase steadily in 18 years.
The company has an early layout in the OLED field and will benefit from the rising trend of the industry. The demand for OLED will be strong in the medium and long term in the future, and the penetration rate of mobile phones will continue to increase. A sixth-generation AMOLED production line will be built soon, and at the same time, we will actively cooperate with R & D in the raw materials and continue to make breakthroughs.
The trough is over, and we are optimistic about future profitability. In 2017, the company was subject to many factors, including the loan problem of Letv, which had a certain impact on the mobile touch screen business and finance. But the company at this point to seize the layout of the future, plan and move later. We believe that the trough of the company has passed and there is plenty of room for a rebound in the future.
Investment rating and valuation
At present, most of the company's profits come from non-mobile phone business, but it only enjoys the low valuation of the mobile phone industry, and there will be the possibility of valuation switching in the process of gradual transformation. Affected by Letv's loan and other factors, the company has a lot of room to rebound upward in the future. It is estimated that the net profit for 17-19 years will be HK $0.30,10.2 and HK $1.31 billion, the EPS will be 1.05,32.70,41.96 Hong Kong cents, and the corresponding PE will be 314.9, 10.1,7.8 times.
Risk hint
The demand for car display screen is not up to expectations; the screen size of mobile phones will continue to change greatly in the future, resulting in a sharp drop in customer order demand; the domestic mobile phone market shrinks, resulting in lower-than-expected shipments of camera modules and fingerprint modules; and the risk that 3D sensing penetration is not up to expectations.