Lianchuang Optoelectronics: Deeply cultivate optoelectronics and lay out the future. Lianchuang Optoelectronics was founded in June 1999. The company was initially a state-owned holding company. The company was listed on the Shanghai Stock Exchange in March 2001, and converted to a private enterprise after completing the restructuring of non-state-owned shares in 2011. In recent years, the company has followed the main strategy of “moving forward and moving back in order”, concentrating on shifting to high-tech, high-barriers, and high-profit industries, gradually shrinking industries with little room for development, such as ultra-micro, cable, and backlight sources, focusing on the two emerging businesses of lasers and high-temperature superconductivity.
Laying out key technical fields, laser products are expected to maintain rapid growth. The company has a full industrial chain layout from pump source core device+laser+downstream application. The company has obtained a total of four product qualifications in special fields in 2020, and achieved a major breakthrough in key technologies for the industrialization of high-power pump sources in 2021. In 2022, the company's laser series product business achieved revenue of 166 million yuan, +428% over the same period last year. With the gradual evolution of downstream technology iterations, the company's laser business is expected to maintain a relatively rapid growth rate.
Facing the future, high-temperature superconductivity is expected to enter a period of rapid development. The company launched the MW grade high temperature superconducting induction heating equipment research and development project in 2013, and the world's first MW grade high temperature superconducting induction heating equipment was officially put into operation in 2023. In 2023, Jiangxi Lianchuang Optoelectronic Superconductivity Application Co., Ltd. signed an agreement with China Nuclear Fusion (Chengdu) Design and Research Institute Co., Ltd. to jointly build a controlled nuclear fusion project to achieve 100 MW of continuous power generation. The total project investment is expected to exceed 20 billion yuan. Domestic controlled nuclear fusion technology is booming, and the company's superconducting business is expected to fully benefit.
Optocouplers contribute to the main revenue elasticity of intelligent controller products. The company's intelligent controller business segment is mainly operated by its subsidiary Hualian Electronics. The company focuses on high-speed optocoupler products. In 2021, Hualian Electronics' optocoupler orders exceeded 200 million yuan, leading the country in high-end high-end optocoupler shipments, and is expected to continue to contribute considerable revenue growth in the future. In terms of intelligent controllers, the company focuses on the intelligent control industry sector, and is expected to continue to grow in the fields of industrial vehicles, industrial control systems, and new energy vehicle electronics in the next 3-5 years.
Investment advice: The company is in the harvest period of strategic transformation. The laser business and high-temperature superconductivity business are expected to relay the company's traditional business and contribute considerable revenue and profit growth in the future. We expect the company's revenue for 2024/2025/2026 to be 35.75/40.42/4.556 billion yuan, respectively, and net profit to mother of 5.02/6.62/831 million yuan, respectively, and corresponding PE 26.21/19.88/15.83 times, respectively. Covered for the first time, a “gain” rating was given.
Risk warning: equity pledge risk; market demand falls short of expectations; technology iteration falls short of expectations; industry competition intensifies.