Revenue in 2023 increased 3% year-on-year, and net profit to mother decreased month-on-month in 4Q23. In 2023, the company's revenue was 32.271 billion yuan (YoY +2.62%), with net profit loss of 2,098 billion yuan; of these, 4Q23 revenue was 7.572 billion yuan (YoY +4.66%, QoQ -12.94%), and net profit loss to mother was 307 million yuan, a decrease of 59 million yuan over the previous month. 4Q23 The company's gross profit margin was 11.26% (YoY +0.99pct, QoQ +6.33pct).
The rise in the price of flexible AMOLED smartphone panels contributed to the recovery of the company's performance. According to data from Qunzhi Consulting, global smartphone panel shipments in 2023 will be about 2.11 billion pieces (YoY +18.1%). Among them, flexible OLED smartphone panels were shipped about 680 million, an increase of 15.7% over the previous year. Domestic OLED panel manufacturers continued to increase their share of the global market, accounting for 43.3% of the global market. Tianma has a rich customer structure and competitive products. In 2023, flexible OLED shipments were about 49.5 million pieces, an increase of 2.6 times over the previous year. According to Qunzhi Consulting, it was observed in March that terminal brands are still actively demanding flexible OLED stocking, and there is room for further increases in the price of individual flexible OLED panels. In 2023, TM18, the company's OLED production line climbed smoothly, and achieved mass production of flagship products with advanced technologies such as folding, HTD, and MLP in leading customers. The improvement in OLED panel prices in 2024 will promote the recovery of the company's performance.
The company's automotive display is leading the world, and the increase in the penetration rate of new energy vehicles is driving the company's automotive business growth. The company has been deeply involved in the automotive field for nearly 30 years. Its products cover thousands of models from mainstream brands, and customers have achieved full coverage of leading international automakers and Chinese independent brands (Top 10). According to Qunzhi Consulting, global automotive display panel shipments reached 210 million pieces in 2023, an increase of 7% over the previous year, a record high. Among them, the automotive front equipment market shipped about 190 million pieces, an increase of 5% over the previous year. Tianma's automotive display panel shipments reached 29.5 million pieces in 2023, accounting for 14% of the global market share, ranking first in the automotive front display market segment. With the gradual penetration of new energy vehicles and intelligent driving, in-vehicle displays are showing a trend of larger screens and multiple screens, and the company's automotive business performance is expected to grow further.
The company's construction of a new production line is progressing smoothly, and the layout of mainstream display technology in all fields of small to medium sizes has been formed. The company has continuously increased its investment in advanced global technology and high-end production lines, and has formed a mainstream display technology layout in all fields of small to medium sizes, including passive, a-Si TFT-LCD, LTPS TFT-LCD, IGZO TFT-LCD, AMOLED, and micro-LED. By the end of 2023, the TM19 production line had completed the transfer of core equipment; the TM20 production line had its first product illuminated in December 2023; and the Micro LED production line had moved the first equipment.
Investment advice: We are optimistic about the performance growth brought about by the accelerated increase in the share of the company's automotive business in major NEV customers; we are optimistic about the industry pricing capacity brought by the company as a leading mobile phone panel manufacturer and production capacity release brought about by the smooth climbing of production lines. The company's net profit to the mother for 2024-2026 is -5.06/3.38/889 million yuan (previous value: 2024-2025 net profit of -2.62/363 million yuan), corresponding to PB of 0.76/0.75/0.73 times, maintaining the “buy” rating.
Risk warning: Panel prices fluctuate, demand falls short of expectations, and the company's OLED business falls short of expectations.