The Zhitong Finance App learned that First Shanghai released a research report stating that the 2024-2025 “Buy” rating predicts revenue of HK$12.6 billion, HK$13.6 billion and HK$15.2 billion respectively. Net profit attributable to the parent company is HK$540 million, HK$615 million and HK$760 million respectively, with a target price of HK$906 million.

First, Shanghai's main views are as follows:

Results for 2023 fell short of expectations:

BOE Precision Electronics is BOE's only vehicle display module and system operation platform, providing customers with vehicle display assemblies and smart vehicle display systems. Revenue of HK$10.76 billion in 2023 increased by 0.4%; net profit of HK$475 million, a decrease of 18%, lower than market expectations. The pressure on performance was mainly due to pressure on product prices in the second quarter, depreciation of the RMB, inventory depreciation, and cost pressure brought about by a steep decline in the commissioning of the Chengdu factory.

Stay ahead of the industry:

According to Omidia data, 1) total vehicle display module shipments, 2) medium and large size (8 inches and above) shipments, and 3) oxide and LTPS shipments will have a compound global growth rate of 4.4%, 8.35%, and 18.16% respectively over the next 3 years. BOE Precision maintains the largest market share in the global automotive display market in terms of delivery volume and area. We have sufficient technical reserves for oversized car displays, curved displays and display systems, PHUDs, enhanced dynamic reality head-up displays (AR-HUD), CMS, seat armrest screens, side door screens, rear-flip screens, and front passenger screens. The traditional A-Si module is under high competitive pressure this year. The company is focusing on breaking through high-end products such as LTPS/Oxide. The world's first 14.6-inch four-channel high-definition (QHD) oxide display products have already entered mass production; DBCell and MiniLED displays have already obtained projects from well-known car manufacturers; and several automotive F-OLED displays have entered the mass production stage.

Overseas markets have great potential:

The overseas automotive display market is far larger than the domestic market. The company set up an overseas mission team. It is expected that 39 client projects will enter mass production in 2024, and the overseas market will achieve double-digit growth.

Chengdu vehicle display base at full capacity:

The Chengdu automotive display base has a design capacity of 15 million pieces per year, covering an area of 4.75-44.8 inches. It is the most advanced and mass-produced special vehicle module production base in the world. It will be fully produced in 2023, with a straight forward rate of about 90% and a yield of about 97% at the end of the year. There were plenty of orders in the first half of 2024. The company implements an asset-light strategy that combines self-production and ODM. Continued optimization of the Chengdu plant will make a positive contribution to the 2024 results.