“Science and Technology Innovation Board Daily”, Feb. 26 (Reporter Wu Xuguang) On the evening of February 25, Wright Optoelectronics released its 2023 annual performance report. During the reporting period, Wright Optoelectronics achieved operating income of 301 million yuan, up 7.27% year on year; realized net profit of 77.1623 million yuan, down 26.84% year on year; realized net profit after deduction of 55,1908 million yuan, down 25.66% year on year.

Regarding the main factors affecting business performance during the reporting period, Wright Optoelectronics said that during the reporting period, the penetration rate of the company's flexible AMOLED in smart phones, automotive and other display fields continued to increase, and domestic OLED panel manufacturers further increased their share of the global OLED market.

“In terms of products, “the company is grasping the OLED organic materials market opportunities. Terminal materials focus on serial product layout of red, green, and blue light-emitting functional materials (Prime materials) and main materials (Host materials). Intermediates focus on promoting the expansion of deuterium-derived products and terminal materials customers and establishing differentiated competitive advantages.” Wright Optoelectronics added.

As a domestic OLED core material supplier, Wright Optoelectronics benefits from the trend of domestic terminal display devices equipped with local OLED screens.

Wright Optoelectronics is mainly engaged in R&D, production and sales of OLED organic materials. As BOE's domestic supplier of OLED light-emitting functional materials, the company has achieved mass production and supply of various OLED organic materials. According to public information, with the continuous refinement of the business, Wright Optoelectronics's OLED terminal materials customers have further expanded to world-renowned display panel manufacturers such as Huaxing Optoelectronics and Huiguang.

“In the long run, flexible AMOLED products are a trend.” Li Leiguang, an analyst in the optoelectronic display industry, said in an interview with the “Science and Technology Innovation Board Daily” reporter that as the application field of OLED expands to medium and large terminal products, the relevant market space is broad, and domestic industrial chain companies are expected to become dominant players in the global OLED industry. However, we should also be wary that the decline in OLED panel prices due to phased oversupply in the panel display sector may squeeze the profit margins of upstream material manufacturers.

Shanxi Securities pointed out that the OLED display industry in which Wright Optoelectronics is located is developing rapidly. In order to gain an advantage in international competition, domestic manufacturers are continuously optimizing costs through continuous process improvements and large-scale production. At the same time, reducing production costs is the only way for OLED display panels to gradually increase their penetration rate and expand their market share in downstream applications. Therefore, “volume increase and price drop” is a common sales situation in the industry. In addition to BOE, there is a possibility that prices will drop for products from other customers, which will adversely affect the company's gross margin and operating performance.

In the last three years, from 2021 to 2023, Wright Optoelectronics's net profit was 107.9 million yuan, 105.5 million yuan, and 77 million yuan respectively, declining year by year.

In response, Wright Optoelectronics stated that the year-on-year decline in net profit was due to a combination of factors such as increased investment in the company's R&D projects, year-on-year decline in government subsidies, and insufficient scale effects of the new Green Host material. In the future, Green Host materials will reduce costs through continuous process optimization and scale effects, and gross margins are expected to improve significantly.

Furthermore, the “Science and Technology Innovation Board Daily” reporter noticed that in the last three-year period, from 2020 to September 2023, Wright Optoelectronics's gross margins were 59.89%, 64.60%, 58.99%, and 63.60%, respectively; net interest rates were 25.64%, 31.64%, 37.63%, and 28.29%, respectively, with significant fluctuations.