Core views
Hisense Vision adheres to a multi-brand layout and high-end product strategy, with remarkable results in recent years. At this new product launch, Vidda launched a new three-color laser projection series and a 1000-zone AI Mini LED TV, further leading the field of 4K+ tri-color laser+ medium and telephoto projection, and expanding the size range and price range of Mini LED TVs, which is expected to consolidate the leading position of smart projection and mini LED TVs. Hisense is leading the development of the display industry. Market share and brand power continue to increase, and product structure and profit levels are continuously optimized. As the official sponsor of the European Cup, Hisense is expected to achieve high-end breakthroughs through brand marketing and new product launches.
occurrences
On May 8, 2024, Hisense Vision held the “Wise and Fearless” Vidda 2024 AI TV & Tricolor Laser Projection Product Launch Conference to officially launch the new three-color laser smart projection product and the new smart TV product.
Brief review
1. What is Hisense Vidda's product strategy?
Leading the three-color laser projection market, TV products adhere to the price-quality ratio. In the field of intelligent projection, Vidda officially entered the market in May 2022. The C1 became the industry's first three-color laser intelligent projection. In May 2023, the C1 Pro series was released for the first time in the industry to use an MCL37 laser (industrial grade), and for the first time, achieved a true brightness of more than 2000 lm (2350 lm). All products released by Vidda so far use laser light sources and are equipped with Hisense's LPU three-color laser engine, which focuses on the 6000+ price band market, leading the new 4K+ tri-color+ medium and telephoto trend. In 2023, Vidda ranked TOP1 in the smart projection DLP market sales growth rate. In the smart TV field, Vidda is positioned as a trendy technology brand, has strong internet attributes, captures young users, and sticks to the price-quality ratio. In 2024, the 32/43/85 inch online sales TOP1, and the X85/R43 each became the number one online single product in this size range, becoming the common choice of 6 million+ young users. In 2023, Vidda launched 75/85/100 inch Mini LED products to achieve balance between performance parameters and price, and the 100-inch Vidda Z100 entered the JD Double Eleven 100” giant screen TV TOP5 list.
2. What new products will be launched at this press conference?
Iterative three-color laser projection C2 series new products, leading the 6000+ home projection market. Vidda now released the C2 Extreme Edition/C2S/C2 Pro/C2 Ultra series three-color laser projection. The initial price was 6399/6999/9499/11999 yuan. It is innovatively equipped with IMAX image quality, gallium nitride power, JBL subwoofers, AI large models, etc., to achieve breakthroughs in brightness and zoom, leading the high-end medium and telephoto three-color laser projection market.
The partition and brightness of the new Mini LED TV have improved markedly, and the price-quality ratio has been further improved. Vidda released the X65/X75/X85/X100 Ultra Series Mini LED TV, starting at 4999/6499/8499/15999 yuan, starting at 4799/6199/7999/15499 yuan. Compared with the Z75/Z85's 512 zone, 1100 Mits peak brightness, and the initial price of 6399/8399 yuan (X85 Pro 256 partition, 1200 nits peak brightness, 7999 original price) in 2023, this new product reached 1000+ zones and 2,500 nits+peak brightness. Performance and parameters have improved markedly. There is no significant change in the initial price, stick to the price-quality ratio, and broaden the 65-inch size range and 4000+ price band, which is expected to further boost Mini LED TVs Shipment scale and market share.
3. What effect will the new product bring?
The penetration rate of tricolor lasers increased rapidly, and Vidda took the leading position. The laser projection market continues to grow, and the penetration rate of medium and long focus three-color laser projection is increasing.
According to Lotu Technology data, China's household laser projection shipments continued to grow from less than 10,000 units in 2015 to 593,000 units in 2023, up 35.5% year on year in 2023. China's shipments are expected to reach 840,000 units in 2024, an increase of 42.4% year on year, and is expected to reach one million units in 2026.
The continuous increase in household laser projection in China is mainly due to its balance of price and image quality, and has become the core choice for larger-screen video entertainment. At the same time, core components in the industry chain such as light sources, lenses, and imaging chips have gradually matured and achieved cost reduction, and there is room for price reduction, and product forms and application scenarios have been significantly enriched. In addition, the proportion of medium- and long-focus laser projectors increased rapidly. According to Lotu Technology data, shipments of mid-long focus laser projectors in 2023 were 410,000 units, up 121% year on year, and the share of shipments increased from 42% in 2022 to 69% in 2023; the penetration rate of tricolor laser technology products was close to 60%, up 32 pct year over year, mainly due to the wider color gamut of tricolor lasers and more realistic color performance. At the same time, they also had higher brightness and contrast, and the picture quality was clearer and brighter, thus becoming the choice direction for brands and consumers, and also benefited from Vidda As players continue to advance 4K+ tri-color medium telephoto technology, Lotu Technology data shows that Vidda shipments will increase 2.5 times in 2023. Vidda has stabilized its position as the leading 4K+ tri-color home laser projector. According to Lotto Technology data, in 2022, Vidda monopolized nearly 80% of the 4K+ three-color medium telephoto home laser projection market with a single product. Jiang Long, head of projection products at Vidda, said in an interview with the “Daily Economic News” reporter that high-end home projection represented by lasers has a lot of room for future growth, and the home projection market of 6,000 yuan+ has not been fully developed in the past 10 years. Vidda focuses on the 6000 yuan+ high-end market segment, and is expected to continue to lead the market share.
Sub-brands are broadening the size range and price range, and the market share and sales share of Mini LED is expected to continue to increase. Hisense brands continue to launch Mini LED TV products, and instead of simply following the decline in performance parameters and prices, they maintain the price-quality ratio while broadening the size range and price range. We judge that Hisense's Mini LED market share and sales share will continue to increase steadily. According to data from Aowei Cloud Network, Hisense currently maintains a market share of Mini LED sales of around 30% in the domestic online and offline KA market, and its share of sales is rising steadily. The sales share has increased from less than 1% in 2021 to more than 3% in 2024, and its sales share has increased from less than 1% in 2021 to nearly 10% in 2024. As Hisense brand quality-to-price Mini LED TVs are recognized by consumers and sold well, Mini LED's sales contribution to Hisense is expected to continue to grow, thereby boosting ASP and profit margins.
Investment advice: Hisense Vision adheres to a multi-brand layout and high-end product strategy, with remarkable results in recent years. At this Vidda product launch, the new three-color laser projection series and the 1000-zone AI Mini LED TV will further lead the field of 4K+ tri-color laser+ medium and telephoto projection, and expand the size range and price range of Mini LED TVs, which is expected to consolidate the leading position of smart projection and mini LED TVs. We predict that in 2024-2026, the company will achieve net profit of 25.18/30.48/3.686 billion yuan, corresponding EPS of 1.93/2.33/2.82 yuan, and the current stock price corresponding PE is 14.35/11.85/9.80 times, maintaining a “buy” rating.
Risk analysis
1) Decline in market demand: The global TV market has entered a stage of stock competition. Market demand overdraft effects in developed countries and regions such as Europe, America, and Japan are gradually showing. At the same time, high inflation has led to a decline in residents' actual purchasing power, and demand for TV shipments will continue to be sluggish. According to TrendForce Jibang Consulting data, global TV shipments in 2023 were about 195 million units (YOY -2.7%), a record low in nearly ten years.
2) Panel price rebound: Inventory of top panel manufacturers continues to decline, and combined production cuts have increased, forming a support for market supply and demand. According to AVC Revo data, the price of TV panels of various sizes began to stop falling in October 2022, and then experienced a slight increase in price. Compared with September 2022, the average price of 75/65/55/50/43/32 inch TV panels increased by a total of 72/73/53/42/19/12 US dollars in April 2024.
3) RMB exchange rate fluctuations: Long-term exchange rate fluctuations will affect the business strategies of foreign trade enterprises. The US dollar exchange rate fluctuates greatly in the short term. According to data from the China Foreign Exchange Trading Center, the current spot exchange rate of the US dollar to the RMB is above 7.1, which is at a high level compared to the same period last year.