Incidents:
Recently, Viscount Electronics released its 2024 quarterly report. The company achieved revenue of 407 million yuan in the first quarter of 2024, an increase of 41.63% over the previous year; net profit without return to mother was 8.5843 million yuan, an increase of 40.92% over the previous year.
Comment:
The company performed well in the first quarter of 2024. Revenue increased 41.63% year on year, net profit after deducting non-return to mother increased 40.92% year on year, and new models were gradually introduced. The company achieved revenue of 407 million yuan in Q1 2024, with a gross margin of 13.22%, a year-on-year decrease of 5.05 pcts and a year-on-month decrease of 3.21 pcts. Mainly the increase in the number of mass-produced products and the introduction of new models into mass production. The production capacity of new models is in a climbing phase, and gross margin has declined. The company actively expanded production. Projects under construction in Q1 2024 reached 135 million yuan, an increase of 453% over the same period last year. Benefiting from the increase in the company's sales revenue, the net cash flow from operating activities improved well compared to the previous year. 2024Q1 increased by 326.35% year over year.
The company successfully expanded backlight display and touch panel technology, and increased research and development of lightweight structural components for automotive displays to meet new market trends and needs. The company enhances technology research and independent innovation, and introduces high-end equipment to enhance product development capabilities to meet the individual needs of customers. In the field of backlight display modules, the company closely follows trends in the automotive industry, consolidated the existing foundation and successfully mass-produced various mini-LED backlight sources, and has mastered 55.8-inch ultra-large vehicle backlight module technology. Among them, blue light mini-LED backlight display modules are leading the innovation of automotive display technology, and their high color gamut and low energy consumption characteristics have made them widely used in consumer electronics fields such as VR, mobile phones, game consoles, and PCs. Mini-LED chips range in size from 50 μm to 200 μm. Effects such as contrast, brightness, and color reproduction are improved by reducing the backlight chip size and shortening the chip spacing. In terms of film touch panels, the company develops integrated products to improve quality and expand to display module covers. For lightweight structural components of automotive display modules, the company increased R&D and investment to meet the market's large screen and multi-screen trend and lightweight demand.
The company invested 15 million US dollars to set up a factory in Vietnam and actively expand overseas markets. On March 21, 2024, in order to achieve the goal of optimizing the global supply chain and improving operational efficiency, the company plans to invest 15 million US dollars to establish a wholly-owned subsidiary Vietnam Weishi Technology in Vietnam to mainly produce new electronic components used in the fields of electronics, computers, automobiles, communications, etc. Using Vietnam's labor cost advantages and geographical location, the company will further expand overseas markets, which will help enhance the company's brand influence and market competitiveness and accelerate the company's global layout.
Company profit forecast and investment rating: The company is a leading automotive backlight module company, benefiting from the penetration of the Mini LED industry. The company's EPS is expected to be 0.70 yuan, 1.03 yuan and 1.39 yuan respectively in 2024-2026, maintaining the “recommended” rating.
Risk warning: (1) the downstream industry is declining; (2) the introduction of Mini LED products falls short of expectations; (3) competition in the industry is intensifying.