Incidents:
On January 26, 2024, Jucan Optoelectronics released its 2023 annual report: The company achieved operating income of 2,481 billion yuan, an increase of 22.30% over the previous year, and net profit to mother of 121 million yuan, an increase of 291.41% over the previous year.
Comment:
The company's revenue in 2023 increased 22.30% year on year, gross margin was 10.44%, up 1.33 pct year on year, and LED chip production continued to grow. In 2023, the company achieved revenue of 2,481 billion yuan, gross margin of 10.44%, an increase of 1.33 pct over the previous year. In terms of products, the LED chip and epitaxial film business revenue was 1,262 billion yuan, up 9.96% year on year, gross margin was 18.21%, up 3.92 pct year on year; other businesses achieved operating income of 1,219 billion yuan, up 38.38% year on year, and gross margin was 2.39%, up 0.04 pct year on year, and the industry gradually recovered. In 2023, the production volume of LED chips was 21.74 million, up 8.37% from 20.06 million in 2022. While production continues to grow, the number of high-quality customers has made breakthroughs in high-end products, and the gross margin level has improved markedly. At the same time, the company strengthened its overseas market expansion efforts, and overseas revenue increased by 23.30% over the same period last year.
The company's product performance and market share have improved markedly, and products such as Mini LED have achieved breakthroughs, and the company is expected to benefit from the development of the Mini LED industry. The company's GaAs products are undergoing technical reserves and layout, and the performance of products such as ultra-high light efficiency and mini LEDs has been rapidly improved. In the field of mini backlighting, the company successfully entered the terminal market of well-known brands. Mini/Micro LED has excellent characteristics such as low power consumption, high integration, high display effect, and high technical life, and the industry is developing rapidly. According to Gaogong Industrial Research LED data, the MiniLED market size in mainland China will rise from 3.78 billion yuan in 2020 to 43.1 billion yuan in 2026, with a compound annual growth rate of 50%. It is expected to reach 10 billion US dollars in 2027. The industry is booming, and the company is expected to benefit from the development of the Mini LED industry.
The company actively bought back shares, demonstrating confidence in future development. According to the company's announcement on February 5, 2024, based on confidence in future development prospects and recognition of the company's value, the company plans to repurchase shares with an amount not less than RMB 300 million (inclusive) and no more than RMB 500 million (inclusive), and the repurchase price shall not exceed RMB 14.00 per share. On February 5, 2024, the company repurchased 3.564,900 shares of the company through centralized bidding transactions. The repurchased shares accounted for about 0.53% of the company's total share capital, and the total amount paid was 294.564 million yuan (not including transaction fees). The company actively bought back shares, demonstrating confidence in future development.
Company profit forecast and investment rating: The company is a leading LED chip company in China. As miniLED production capacity continues to expand in the future, the company's performance is expected to continue to grow. The company's EPS is expected to be 0.21 yuan, 0.35 yuan, and 0.44 yuan respectively in 2024-2026, maintaining the “recommended” rating.
Risk warning: (1) the risk that the fund-raising project will not achieve the expected benefits; (2) the risk of increased market competition; (3) the risk of technological iteration.