Leading manufacturers in the localization of OLED materials and equipment grew steadily, maintaining the publication of the 2023 annual report and the first quarter report of 2024 by “buy” rating companies, achieving operating income of 520 million yuan in 2023, +12.7% year over year; achieving net profit of 120 million yuan to mother, +8.2% year on year. 2024Q1 achieved revenue of 258 million yuan, +6.99% YoY; net profit to mother was 95 million yuan, +0.22% YoY. Since 2023, in the context of the gradual increase in the OLED penetration rate and the localization rate of OLED materials, the company has focused on developing the markets for organic light-emitting materials, packaging materials, and PSPI materials, driving the rapid growth of organic light-emitting materials revenue, and ultimately promoting the steady growth of the company's business performance. Considering some delays in the release of some new materials and equipment order revenue confirmation, we lowered our 2024-2025 profit forecast and added a 2026 profit forecast. The net profit for 2024-2026 is 2.03 (-0.19) /3.08 (-0.25) /435 million yuan respectively, corresponding to EPS of 1.36 (-0.14) /2.07 (-0.17) /2.93 yuan, respectively. The current stock price for 2024-2026 is 23.6/15.5/11.0, respectively Double, I am optimistic that the company will continue to benefit from domestic alternatives in the OLED industry chain and maintain a “buy” rating.
The OLED materials business continues to expand. In terms of materials, the development of high-generation evaporation source equipment is steadily advancing. The company's G', R', and B' materials have been introduced and stably supplied, packaging materials have been put into production lines for stable supply, and PSPI materials have passed mass production tests by some customers and begun batch supply; at the same time, some red and green light-emitting layer materials have passed customer verification, which is expected to create a new growth point for performance. In terms of equipment, the company has initially completed the transformation from a single evaporation source business to production line transformation and perovskite preparation: fully exploiting the sixth-generation evaporation source market, winning the bid for Mianyang BOE's sixth-generation AMOLED (flexible) production line transformation project in January 2024; actively carrying out technology research and development of eight-generation evaporation sources, and has now completed prototype production; at the same time, it is also steadily advancing the development of high-value-added products such as evaporators and perovskite evaporation machines for silicon-based OLEDs.
Materials+equipment is two-wheel drive, leading OLED localization in the future. The company's “R&D project for high-performance light-emitting materials and AMOLED light-emitting materials with an annual output of 10,000 kg of AMOLED” has been successfully completed. At the same time, it will also invest no less than 680 million yuan to build a new base in Beihu District of Changchun City. In the future, with the gradual release of production capacity and the continuous completion of customer imports, the OLED materials business is expected to maintain high growth. On the equipment side, the company is promoting the transformation from a single evaporation source business to production line transformation and perovskite, etc., and is taking good care of upgrading from a sixth-generation evaporation source to an eight-generation evaporation source, which is expected to continue to create new growth points for the company.
Risk warning: New product development or introduction falls short of expectations, and OLED panel shipments fluctuate.