Event: according to the company's semi-annual report for 2022, 2022H1 achieved a revenue of 1.072 billion yuan, down 5.98% from the same period last year, and a net profit of 112 million yuan, down 10.23% from the same period last year. 2022Q2 achieved revenue of 564 million yuan, down 4.25% from the same period last year, up 11.02% from the previous month, and realized a net profit of 59 million yuan from the same period last year, down 13.45% from the same period last year and up 13.46% from the previous year.
Traditional LED backlight short-term pressure, automotive LED and Mini LED and other new business gradually increased: the company's performance declined in the first half of the year, of which the company's LED product revenue of 967 million yuan, down 7.81%, accounting for 90.28% of operating income, gross profit margin of 25.49%, a year-on-year decline of 0.56pct.
Mainly due to the instability of the global economy of 2022H1, there are many domestic epidemics, resulting in greater market pressure on consumer electronics terminals. But at the same time, the continuous popularity of new energy vehicles and Mini LED emerging markets have begun to expand, which is expected to become a new growth point of the company in the future.
Automotive LED business continues to develop, and customer introduction is progressing smoothly: with the widespread popularity of new energy vehicles and the arrival of the trend of on-board intelligent automation, the demand for multi-screen, large-screen and high-definition vehicles continues to rise. The company's automotive LED business continues to perform outstanding, in the global strategic customers continue to achieve major breakthroughs, the proportion of sales steadily increased. Automotive backlight products have fully entered the global customer supply chain system, is the only mainland brand, based on the display screen in the car cockpit has a high proportion of value, the market capacity will continue to increase in the future. The company's gauge-grade MiniLED backlight can be used in vehicle electronics such as in-vehicle instrumentation, central navigation, rear entertainment and rearview mirror screen backlight, while the gauge-grade MiniLED direct display module can be used in vehicle internal atmosphere, external lighting and external media display. With the deepening of customer cooperation in the future, the company's automotive LED business is expected to break out.
The traditional LED industry is waiting for recovery, and Mini LED shows that the application starts rapidly: the traditional LED industry has entered a mature period, the industry concentration has been further enhanced, and high-quality resources have been tilted to the head enterprises, forming a competitive pattern of the strong. Although the LED industry is affected by the weak demand for consumer electronics downstream, Mini LED emerging markets have begun to take volume, and Mini LED is expected to succeed the traditional LED industry and become a strong driving force for future development. According to Arizton data, the global Mini LED market will grow from US $150 million in 2021 to US $2.32 billion in 2024, and CARG will be 149.2% in 2021-2024. In addition, with the rapid development of automobile intelligence, vehicle screen, as an important medium of human-vehicle interaction and an important embodiment of automobile future and science and technology, is also showing a large screen, multi-screen, high-definition, interactive, pleomorphic and other development trends, automotive LED will also usher in a period of rapid development. According to MRFR statistics, it is expected that the size of the vehicle display market will continue to grow to $39.7 billion by 2027, with a compound growth rate of 13% from 2021 to 2027.
Maintain "overweight" rating: we are optimistic about the company's leading position in the backlit LED market and accelerate its layout in the Mini LED field, which is expected to become a driving force for the company's performance growth in the future. It is estimated that the company's homing net profit from 2022 to 2024 is 2999 376 Universe 426 million yuan, EPS is 0.22 Universe 0.28 Placement 0.32 Yuan, corresponding PE is about 20X, 16X, 14X respectively, maintaining the "overweight" rating.
Risk tips: capacity release is not as expected, downstream demand is not as expected, Mini LED penetration is not as expected, and the impact of the epidemic is higher than expected.
