Event: on July 19, 2023, the company released its mid-2023 report. In the first half of 2023, the company achieved operating income of 1.199 billion yuan, an increase of 19.21% over the same period last year, and a net profit of 25 million yuan, down 41.59% from the same period last year. Corresponding to the second quarter of 2023, the company achieved a single-quarter revenue of 656 million yuan, an increase of 25.00% over the same period last year, and a net profit of 33 million yuan per quarter, an increase of 79.83% over the same period last year.
The gross profit margin of Q2 LED chip and epitaxial wafer business continues to pick up, and capacity utilization remains high. In the first half of 2023, the company's LED chip capacity utilization reached 98.27%, maintaining a high level. At the same time, the single-quarter gross profit margin of LED chip and epitaxial wafer business in 23Q2 reached 20.08%, an increase of 6.41pct compared with 23Q1. Driven by the recovery of consumer activity in the first half of 2023, the signs of recovery were further highlighted in Q2, the company's revenue from high-efficiency products continued to rise, revenue from silver mirror products doubled, and Mini LED was mass-produced on a small scale. We believe that as the company's high-end products continue to launch, revenue is expected to continue to increase.
Continuous meticulous management, inventory, accounts receivable turnover days remain low. Jucan Optoelectronics insists on "management enabling operation", adheres to the fine management model covering the whole process of operation, and strengthens independent technological innovation and cost control. On the basis of the continuous increase in R & D investment, the company promotes the performance improvement and structure upgrading of high-end products, and the price of products picks up steadily. In addition, the economies of scale effect is highlighted, some gas self-made, raw materials prices reduced, manufacturing costs significantly reduced. As of the mid-2023 report, the company's inventory turnover days is 44 days, accounts receivable turnover days is 64 days, maintaining a low position.
Based on the LED chip industry, add Mini/Micro LED chips. In January 2023, the company was approved by the CSRC that the company intends to issue no more than 163 million A-shares to specific objects. the funds raised in this plan will be mainly used for Mini/Micro LED chip research and development and manufacturing expansion projects, with a total investment of 1.55 billion yuan. After the completion of the project, it will increase the annual production capacity of 7.2 million Mini/Micro LED chips. After the completion of this fund-raising project, the average annual sales income of Mini LED chips is expected to be 1.13 billion yuan, and the annual average profit is 150 million yuan. The addition of Mini/Micro LED will help the company to adjust its product structure, expand channels and upgrade technology, and at the same time consolidate and enhance its position in the industry.
Profit forecast and investment rating. We estimate that the operating income of the company in 2023-2025 is 2.475 billion yuan, 27.73 billion yuan, respectively, and the net profit of returning to the parent in 2023-2025 is 1.73 billion yuan / 242 million yuan, respectively, and the corresponding EPS is 0.31 shock 0.38 pound 0.44 yuan per share. Considering the valuation level of comparable companies, we give a 23-year PE valuation range of 28-30x, corresponding to a reasonable value range of 8.78-9.40 yuan, and a 23-year PS valuation range of 3-4x, corresponding to a reasonable value range of 13.45-17.93 yuan. considering the two valuation methods, we think that the reasonable value range of the company is 11.11-13.67 yuan per share, maintaining a "better than the market" rating.
Risk tips: the price of LED products has dropped significantly; the competition in the industry has intensified; the release of production capacity of the company's production line is not as expected; and the epidemic situation continues to worsen.