Events:
On October 29, Weishi released its quarterly report for 2023, saying that the company's revenue in the first three quarters of 2023 was 1.124 billion yuan, an increase of 9.79 percent over the same period last year; its net profit was 65.7978 million yuan, down 14.18 percent from the same period last year; and its net profit was 60.8685 million yuan, down 16.30 percent from the same period last year.
Comments:
The company's revenue grew by 9.79% in the first three quarters of 2023, and the company increased its capital investment. The company achieved revenue of 1.124 billion yuan in the first three quarters of 2023, an increase of 9.79% over the same period last year. 2023Q3 realized revenue of 472 million yuan in a single quarter, an increase of 13.13% over the same period last year, mainly due to a decrease in exchange rate earnings due to exchange rate changes, while the company increased its research and development. 2023Q3 realized net profit of 28.692 million yuan, down 36.67% from the same period last year. 2023Q3's gross profit margin was 19.16%, down 0.3pct from a year earlier and increasing 1.62pct from a month earlier. The company actively increased capital investment, and intangible assets increased by 290.65%, mainly due to the acquisition of land use rights in Kunshan and Huai'an; at the same time, the company's machinery and equipment increased, and projects under construction increased by 155.01% compared with the same period last year. Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets increased by 105.74%.
The company's R & D expenses increased by 20.71% in the first three quarters of 2023, vigorously promoting the development of intelligent cockpit super-large screen backlight modules and other products. The company pays attention to product research and development, attaches importance to technological innovation, establishes an efficient linkage development system with downstream panel manufacturers and vehicle manufacturers, breaks the technical threshold, and devotes itself to the technical advantage to keep the industry ahead in the field of vehicle backlight. The company's R & D expenditure in the first three quarters of 2023 was 90.0361 million yuan, an increase of 20.71 percent over the same period last year. With the evolution of the trend of automobile intelligence, new modes such as large screen, multi-screen, curved screen, special-shaped screen and so on emerge one after another in the field of vehicle display, and new technologies such as TFT-LCD, Mini-LED and Micro-LED continue to emerge. The company accurately locates the research and development direction, and vigorously promotes the development of intelligent cockpit super-large screen backlight module and other products.
Automobile intelligence and lightweight is the general trend of the industry, the company plans to issue convertible bonds of no more than 590 million yuan, mainly invested in lightweight vehicle new display projects. The vehicle display industry is gradually developing in the direction of large screen, high definition, split screen and personalization, and the market share of new products such as central control screen, double screen and car entertainment screen is constantly increasing. According to Omdia, global shipments of medium and large car displays will grow at a compound annual growth rate of 12.3% in 3 years and 11.1% in 5 years, mainly driven by the increasing use of backseat entertainment, electronic mirrors, dashboard displays, HUD and central stacked displays. The company plans to issue convertible bonds of no more than RMB 590 million to invest in lightweight vehicle display module projects and replenish liquidity. At present, the concept of automobile lightweight is rapidly infiltrating in car body manufacturing and automobile structural parts, and many domestic upstream manufacturers are actively arranging automobile lightweight projects. including automobile large-scale integration project, automobile lightweight core parts project and core die-casting equipment and so on.
Company profit forecast and investment rating: the company is the leading enterprise of vehicle backlight module, benefiting from the dual drive of Mini LED and VR. It is estimated that the company's EPS from 2023 to 2025 will be 0.62 yuan, 0.99 yuan and 1.23 yuan respectively, maintaining the "recommended" rating.
Risk tips: (1) downstream automobile and other industries boom downward; (2) the introduction of Mini LED products is not as expected; (3) industry competition intensifies.