Events:
The company released its third quarter 2023 results report. In the first three quarters, the company achieved operating income of 1.828 billion yuan, an increase of 18.62% over the same period last year, and net profit of 77 million yuan, an increase of 158.92% over the same period last year, deducting non-return net profit of-7 million yuan, an increase of 88.66% over the same period last year.
Effective cost control and improved profitability
The market terminal demand recovered, the company's capacity utilization rate and production and sales rate remained consistently high, and the company's revenue scale increased greatly in the first three quarters. At the same time, the company continues to maintain high production efficiency, cost control and effective control, during the expense rate dropped significantly, profitability gradually improved. In the first three quarters, the company's gross profit margin was 9.84%, year-on-year-1.98pct; net profit margin was 4.22%, year-on-year + 2.29pct. In the first three quarters, the company's expense rate was 6.69%, a year-on-year decline of 3.15pct, and the sales expense rate / management expense rate / financial expense rate / R & D expense rate were 0.58% (yoy-0.06pct) / 1.83% (yoy-0.86pct) /-1.17% (yoy-1.34pct) / 5.45% (yoy-0.88pct) respectively.
Fund-raising projects continue to promote the rapid development of Mini LED chips
On September 6, the company issued additional shares and went public. The issue of 11800 shares, the issue price of 9.20 yuan per share, raising 1.086 billion yuan for Mini/Micro LED chip research and development and manufacturing expansion project. The fund-raising project mainly produces Mini LED chips. after the completion of the project, it will form an annual production capacity of 7.2 million Mini LED chips. it is estimated that the average annual sales income of Mini LED chips is 1.13 billion yuan, and the average annual profit is 150 million yuan. The smooth progress of the fund-raising project is conducive to the steady implementation of the company's development strategy in terms of product structure adjustment, channel expansion and technology upgrading, helps to accelerate the omni-directional layout of the business field, consolidate and enhance its position in the industry, and also help to strengthen the company's technological advantages in the field of Mini/Micro LED chips.
Earnings forecast, valuation and rating
Considering that the industry demand is expected to hit bottom, we estimate that the company's operating income from 2023 to 2025 will be 2.160 billion yuan (the original value is 24.31 million), and the year-on-year growth rate will be 21.09% 16.32% and 10.61% respectively. The net profit of return to the home is RMB 1.14,000,000 (the original value is RMB 1.39cm), and the year-on-year growth rate is 280.25%, 45.13%, 41.68%, respectively, and the EPS is 0.17max, 0.25pm, 0.35 per share respectively. In view of the fact that the company is the leading LED chip manufacturer in China and the operating efficiency is leading in the industry, it is recommended to keep paying attention to it.
Risk tips: downstream demand recovery is not as expected, LED chip prices are not as expected, mini/microled chip research and development is not as expected.