Domestic MOPA laser leader, national-level “specialized and innovative”, mastering core optical technology. The company is the first domestic manufacturer of commercial MOPA pulsed fiber lasers and a leading provider of laser/optical intelligent equipment; its products are widely used in consumer electronics, pan-semiconductors, new energy and other fields. In 2017-2022, the company's revenue increased from 633 million yuan to 1,173 million yuan, and the CAGR was 13.12%.
Lasers help the manufacturing industry move towards higher end, and application scenarios expand into various fields. According to the “2023 China Laser Industry Development Report”, in 2018-2022, China's laser equipment market increased from 60.5 billion yuan to 86.2 billion yuan, with a CAGR of 9.25%. In 2018-2022, China's fiber laser market increased from 7.74 billion yuan to 12.26 billion yuan, and the CAGR was 12.19%, showing high growth. In 2018, the company's MOPA pulsed fiber laser had the highest market share in domestic sales revenue, and the overall fiber laser market share was third.
The lithium battery industry is growing steadily, bringing room for growth to the company's laser equipment business. Laser processing covers processes such as front-end production, mid-stage welding, and post-stage module PACK packaging of lithium battery production lines, such as:
laser cutting, welding, cleaning, marking, etc. According to GGII data, in 2021-2025, the market size of lithium battery laser equipment is expected to grow from 7.4 billion yuan to 13 billion yuan. In 2022, the lithium battery laser processing solutions provided by the company were verified to work well on site by leading customers in the industry, and batch orders were obtained.
The iterative upgrading of photovoltaic technology routes has brought opportunities for the company's products to enter. Cost reduction and efficiency is the main theme of the photovoltaic industry. As PERC batteries become popular and gradually approach the theoretical limit of photoelectric conversion efficiency, battery technology represented by TopCon, HJT, and perovskite has received market attention; laser processing technology has important applications in cutting, marking, drilling, transfer, and laser crystallization of photovoltaic cells. The company is one of the first manufacturers in the industry to achieve batch shipment of TopCon SE laser-doped light sources. It can also provide customers with laser die-cutting equipment for the photovoltaic perovskite field. It is expected that the iterative upgrading of technology in the photovoltaic industry will drive the growth of the company's performance.
The prospects for the XR industry are promising, and the company's new engine for intelligent optical inspection business. With technological breakthroughs and the continuous enrichment of the ecosystem, the XR industry will experience rapid growth and place higher and greater demands on optical inspection, such as image distortion, image clarity, screen defects, and screen brightness difference detection. The company has successfully developed XR optical inspection equipment by connecting with well-known global customers. As demand for XR increases, the optical inspection business is expected to become a new engine for performance growth.
Investment suggestions: We expect the company to achieve revenue of 1,339 billion yuan, 1,779 billion yuan and 2,299 billion yuan respectively in 2023-2025, and realized net profit of 141 million yuan, 214 million yuan, and 289 million yuan respectively, corresponding to EPS of 1.49 yuan, 2.25 yuan, and 3.04 yuan, respectively. Referring to the valuation level of comparable companies, considering that the company, as a leading domestic MOPA laser, is actively expanding downstream lithium-battery/photovoltaic laser equipment and optical inspection equipment, and has made positive progress, its market share is expected to gradually increase with its own technical advantages, giving it 40 times PE in 2024, with a target price of 90 yuan, coverage for the first time, and a “recommended” rating.
Risk warning: perovskite industry development falls short of expectations, lithium battery industry development falls short of expectations, XR industry development falls short of expectations, laser technology iteration falls short of expectations, R&D progress falls short of expectations, etc.