On April 30, 2024, the company released its 2024 quarterly report. In the first quarter of 2024, the company achieved operating income of 45.888 billion yuan, an increase of 20.84% over the previous year, and the company achieved net profit of 984 million yuan, an increase of 297.80% over the previous year. Of this, net profit without return to mother was 597 million yuan, an increase of 135.77% over the previous year.
The company's gross margin for the first quarter of 2024 was 14.48%, up 7.64pcts year on year, and the company's net margin was 1.05%, up 4.3 pcts year on year.
The competitive pattern of the industry has been optimized, and the management strategy of panel factories has changed to “control production and price stability”. Entering the first quarter of 2024, due to factors such as the Spring Festival vacation and panel factory maintenance, the LCD industry's operating rate fell to a low level in February, driving panel prices to stop falling and rebounding in February; in March, as terminal stocking demand increased, panel prices rose further, and the LCD industry's operating rate also increased dramatically. According to consulting agency data and analysis, the LCD industry's operating rate in March was around 80%, of which the LCD TV operating rate was over 85%.
Demand for panels picked up at an accelerated pace, and product prices continued to rise. Benefiting from the holding of major sporting events in 2024, the recovery in demand for TV terminals and panels is expected to accelerate. Especially in the context of continuing the trend of larger TVs, TV panel shipments and area are expected to double increase. In terms of product prices, according to data and analysis from consulting agencies, entering the first quarter of 2024, LCD TV panel prices experienced price stabilization in January and an overall rise in February. After experiencing price stabilization in January and an overall rise in February, the price increase expanded markedly in March, and prices continued to rise in April. The upward trend in IT product prices has begun to show initial signs. Among them, desktop display products have risen in some sizes since March, overall prices have risen in April, and laptop products have risen slightly since late April. The reshaping of the scale of production capacity and the stabilization of the industrial pattern will provide an opportunity for the healthy development of the panel industry. 2024 is expected to be a turning point for the panel industry to break out of its trough.
Invest in the construction of AMOLED higher-generation lines to seize a new high ground for semiconductor displays. By investing in the 8.6th generation AMOLED production line project, the company is building the world's first batch of high-generation AMOLED semiconductor display production lines, which is expected to simultaneously launch products in the international industry, seize the strategic opportunity of the “blue ocean” of high-generation AMOLED semiconductor displays, further enhance the company's overall competitiveness in semiconductor displays, and consolidate its position in the industry. At the same time, many well-known brands within and outside the United Nations are jointly promoting the upgrading of medium-sized IT products to OLED screens and opening up a broad market for medium-sized OLED screen products.
Investment advice: Give a “buy” rating. The company's revenue for 2024-2026 is estimated to be 1,949.78/2,116.39/227.27,27,27,71 billion yuan, and net profit to mother of 49.65/81.64/12.220 billion yuan, respectively, and corresponding PE 33.06/20.11/13.43, respectively.
Risk warning: panel shipments fall short of expectations, panel price increases less than expected