Incident: On the evening of November 16, the company issued the “Reminder Notice on Receiving Proposals from the Company's Actual Controller and Chairman to Repurchase the Company's Shares”. Chairman Zhou Jinzhi proposed that the company use its own funds to repurchase some of the shares already issued by the company through centralized bidding transactions.

The repurchase of shares is used for equity incentives, demonstrating confidence in future development. The company's repurchase price shall not exceed 150% of the average stock trading price for the 30 trading days before the board of directors passed the repurchase resolution. The repurchase amount shall not be less than 30 million yuan and shall not exceed 50 million yuan. The repurchase is used for employee equity incentive plans and employee stock ownership plans. The company's repurchase of shares is used to motivate employees, fully mobilize the enthusiasm of employees, promote the company's long-term steady development, enhance team cohesion and enterprise competitiveness, and demonstrate confidence in future development.

The MSG Sphere spherical screen in Las Vegas, USA began operation, and the construction of an “entertainment landmark” is expected to accelerate the LED industry. On September 29, MSG Sphere in Las Vegas officially opened to the public at a cost of about 2.3 billion US dollars. It has a 160,000 square foot LED display inside and has the highest 16Kx16K resolution in the world. The outside of the sphere is a 580,000 square foot spherical LED array. The spherical venue has a total capacity of nearly 20,000 people. The design is based on the concept of “immersive performance”. It can host movies, music, and sports events, so that the audience can enjoy an unprecedented audiovisual experience. With the improvement of 4K/8K ultra-high-definition display technology, LED application fields are gradually being promoted. Currently, the world is setting off a boom in LED spherical screen construction, and the construction of spherical stadiums is becoming an important means of driving local infrastructure, consumption and entertainment. In addition to MSG Sphere, world-famous spherical screen landmarks include Saudi Arabia's Boulevard World dome screen, Kuwait City's “Eye of Kuwait”, and the planned MSG Sphere Tower in London, which can accommodate 21,500 people.

Investment proposal: Leading domestic video image display control, card position in the core midstream of the LED industry, overtaking traffic through curves with video processing technology, and the rapid release of new video processing equipment at home and abroad will be realized. We predict that the company will achieve revenue of 1,020, 14.66, and 2,070 billion yuan in 2023-2025, and net profit of 215, 3.21, and 483 million yuan. The corresponding PE will be 31x, 20x, and 14x, maintaining the “increased holding” rating.

Risk warning: Overseas expansion falls short of expectations; technology implementation progress falls short of expectations; government spending falls short of expectations.