Event: the company announced the results forecast for the third quarter. The net profit belonging to the shareholders of the listed company in the first three quarters increased by 28% over the same period last year, with a profit of about 477 million yuan to 539 million yuan. In the same period last year, the net profit belonging to shareholders of listed companies was 372 million yuan. The net profit of returning to the mother in the third quarter was 1.63-226 million yuan, an increase of 5%, 45% over the same period last year, and 156 million yuan in the same period last year.
Demand in segments is strong, and industry leaders control growth.
During the reporting period, the downstream segment of the LED industry maintained a good degree of prosperity, such as small spacing LED, urban landscape lighting, automotive LED lighting and other industry segments, such as strong demand, the company as a LED display chip leading enterprise, benefiting from the high landscape demeanor of industries such as small spacing LED, the company LED display chip business continues to maintain a good growth trend.
Extension and outsourcing, expansion of production capacity and widening of the business track at the same time
The investment projects include: LED chip and its advanced technology extension fields including LED epitaxy and chip, sapphire substrate, ultraviolet LED, infrared LED and Micro LED; MEMS sensors, VCSEL laser, GaN-based laser, GaN power electronic devices and other new projects.
Industry vertical integration improves the moat for the company's future development, while business expansion increases the company's performance growth points. During the reporting period, Mexin Semiconductor realized consolidation, which made a certain contribution to the company's net profit during the reporting period.
Small shipments of Mini LED and Micro LED to grasp the development trend of the industry
In the third quarter, the company made a comprehensive upgrade of LED products and increased investment in innovative products such as Mini LED and MicroLED, which had a certain impact on the sales and overall expenses of white LED products in the third quarter. In the long run, the flashpoint of the future growth of LED chips must be Mini and Micro LED. Short-term labor pains and capital investment support the rapid shipment of products to seize the market when future products break out.
Profit forecast and investment suggestion
It is estimated that the company's EPS from 2017 to 2019 will be 0.70,0.90,1.13 yuan respectively, and the corresponding PE will be 12.5,9.8 and 7.8 times, respectively. It is optimistic about the company's long-term strategic layout and maintain its "buy" rating.
Risk hint: product prices drop, investment output is lower than expected.