Incidents:
On August 29, Weishi Electronics released its semi-annual report for 2023. The company achieved operating income of 652 million yuan, an increase of 7.49% over the previous year. Net profit attributable to shareholders of listed companies was 365.161 million yuan, an increase of 3.98% over the previous year. Net profit excluding non-attributable net profit was 32.1765 million yuan, an increase of 17.37% over the previous year.
Comment:
The company's operating income increased by 7.49% in 2023H1, and net profit after deducting non-attributable income increased by 17.37%. The company seized the opportunities for rapid development in the automotive electronic systems market and achieved steady growth in performance. 2023H1 achieved revenue of 652 million yuan, an increase of 7.49% over the previous year. Revenue mainly comes from automotive backlight display modules. Benefiting from the rise of the smart cockpit concept, the automotive backlight display module market will continue to grow. In the first half of 2023, the company's net profit to parent and net profit after deducting non-attributable income were 3651.61 and 32.1765 million yuan respectively, up 3.98% and 17.37% year-on-year respectively. The company's expenses are well controlled. 2023H1's sales expenses were 8.3697 million yuan, an increase of 1.72% over the previous year; management expenses were 31.2927 million yuan, an increase of 4% over the previous year. The company has seized the opportunities for rapid development in the automotive electronic systems market and achieved steady growth in performance.
The company is committed to maintaining and consolidating its technical advantages in the field of automotive backlighting. The R&D cost of the 2023H1 has increased by 23.95%, and the 55.8-inch ultra-large automotive backlight display module with curved surfaces is now being continuously tested as a model ready for mass production. The company has established cooperative relationships with world-renowned LCD manufacturers and domestic and foreign Tier 1 suppliers, and has established an efficient joint development system with downstream panel manufacturers and automakers to maintain simultaneous product development, so that the company has a rapid development response speed. The company's 2023H1 R&D expenses were 598.23,700 yuan, an increase of 23.95% over the previous year. At present, the company's 35.6-inch and 47.9-inch curved ultra-large vehicle backlight display modules have been mass-produced, and the 55.8-inch curved ultra-large vehicle backlight display module is currently being continuously tested as a pre-mass production model.
The company's products have been recognized by many global giants in the industry, grasping the development direction of VR and in-vehicle display Mini LED. According to CINNO Research statistics, total global vehicle display panel shipments in 2022 were about 192 million units, an increase of 6% over the previous year. Global vehicle display panel shipments are expected to exceed 200 million units in 2023. The company has established cooperative relationships with global LCD giants such as Tianma, JDI, Youda, LGD, Innchuang, Sharp, and BOE, and continues to promote research and development in new directions of automotive displays. Currently, the company has conquered technologies such as ultra-large screens, 3D curved surfaces, blue light mini LEDs, and multi-screen integration. In the field of consumer electronics, the company continues to provide VR backlight display modules to well-known social networking platform companies in the US, invest and develop mini LED VR backlight technology, and prepare for mass production of targeted orders for game backlight display modules from world-famous game console customers.
Company profit forecast and investment rating: The company is a leading automotive backlight module company, benefiting from the dual drive of Mini LED and VR. It is estimated that in 2023-2025, the company's EPS will be 0.62 yuan, 0.99 yuan, and 1.23 yuan, respectively, and the corresponding PE stock prices will be 23X, 14X, and 12X, respectively, maintaining the “recommended” rating.
Risk warning: (1) Downstream automobile and other industries are declining; (2) the introduction of Mini LED products fell short of expectations; (3) industry competition intensified.