20H1 net profit fell 2.4% compared with the same period last year. Q2 increased by 60.0% compared with the same period last year, in line with market expectations.

The company's 20H1 revenue was 1 billion yuan, down 12.8% from the same period last year; the net profit was 140 million yuan, down 2.4% from the same period last year; the gross profit margin was 29.0%, up 2.0 pct from the same period last year; and the net profit rate was 14.3%, up 1.7pct from the same period last year.

Of this total, Q2 revenue was 560 million yuan, up 27.5% from the previous month; the net profit returned to the mother was 90 million yuan, up 60.0% from the previous month. Q2 gross profit margin 30.1%, month-on-month increase 2.6pct, year-on-year increase 1.8 pct; net profit rate 15.8%, month-on-month increase 3.3pct, year-on-year increase 1.3pct.

Backlight LED market share increased, lighting LED transformation of high-end products.

In the first half of the year, the company's backlit LED business achieved revenue of 770 million yuan, down 8.9% from the same period last year, accounting for 77.3% of the operating income, and the product gross profit margin was 29.3%, down 2.4pct from the same period last year. Capacity utilization rate of 71.8%, year-on-year decline of 9.4pct, mainly affected by the epidemic, while Q2 with 5G-driven electronic terminal demand-driven, the company's backlight LED products global market share has increased, and vehicle backlight LED has been widely used in domestic automotive instruments and LCD screens through module factories such as QC, Youda, Tianma, BOE, etc.

In the first half of the year, the revenue of Lighting LED reached 100 million yuan, down 10.6% from the same period last year, accounting for 9.8% of the operating revenue.

Under the background of the slowdown in the global LED lighting market, the epidemic situation and the impact of trade conflicts, the company strives to reduce the adverse effects and has launched high-end lighting products one after another. In the first half of the year, the company's automotive lighting LED has entered Chery, BYD, Jianghuai and other automotive supply chain systems.

In the early stage of raising convertible bonds, MiniLED is expected to become a new growth point, giving a "overweight" rating. At the beginning of this year, the company completed the convertible bond collection, raising funds of 700 million, mainly used for backlighting / automotive / display LED production capacity expansion and MiniLED and other high-end modular R & D investment. In terms of MiniLED, the company already has the mass production capacity of COB/COG, and is expected to become a new growth point with the rise of MiniLED applications in the future. We expect the company's net profit to be RMB 320, 397, 000, 000,

Risk Tips:

Epidemic situation affects supply chain and industry chain.

The company's R & D progress is not as expected.