The performance is in line with expectations, and the release of 2019H2 capacity is about to accelerate.
The company issued a forecast for the 2019 interim report: net profit of 0.25-31 million yuan, down-20% from the same period last year.
The year-on-year decline in the company's performance is due to the decline in net profit due to the slowdown in operating income growth due to the adverse macroeconomic conditions such as the intensification of the trade war between China and the United States. At the same time, according to the established strategy, the company continues to carry out new technology and new product research and development, strengthen domestic and foreign market development and talent reserve, R & D investment and labor costs increase rapidly.
We believe that the company's performance is in line with market expectations and is expected to accelerate the company's growth after capacity is put into operation in the second half of the year.
In March 2019, the Ministry of Industry and Information Technology, the State Administration of Radio and Television and the Central Radio and Television head Office jointly issued the Action Plan for the Development of Ultra High definition Video Industry (2019-2022). The Action Plan puts forward the development goals of China's UHD video industry by 2022. Under the guidance of policies and the active input of resources from all parties, the overall size of the industry is expected to exceed 4 trillion yuan, the number of UHD video users has reached 200 million, the 4K industrial ecosystem has been basically improved, and breakthroughs have been made in the R & D and industrialization of 8K key technology products, forming a good pattern of coordinated development of technology, products, services and applications. We believe that the launch of the "Action Plan" will directly benefit the high-end security lens suppliers represented by United Optoelectronics. In the future, with the continuous upgrading of the security video surveillance system, the security lens will enter a new stage of development with both quantity and price rising.
Cut into the market of fingerprint lenses under the optical screen, and the growth space opens quickly.
Joint Optoelectronics began to lay out consumer electronic lens business in the second quarter of 2019, ultra-short focus laser projection lens has achieved stable delivery, mobile phone optical screen fingerprint lens has also achieved mass production and delivery in this quarter, revenue is expected to explosive growth. 2019 is the year of the outbreak of fingerprints under the optical screen, United Optoelectronics can quickly cut into the domestic brand mobile phone industry chain and seize the opportunity of industrial explosion, reflecting the company's strong R & D capability and industrial chain status.
Investment advice: maintain a "buy" rating
We are optimistic about the company's entry from the traditional security lens market to the under-screen fingerprint market, and the company's growth space is expected to double. It is predicted that the net profit of the company from 2019 to 2021 is 1.67 billion yuan, respectively, and the current stock price corresponding to PE is 43.1, 25.7, 19.9X, respectively. Maintain a "buy" rating.
Risk Tips:
Customer demand is lower than expected, upstream raw material prices fluctuate.