Deeply involved in new displays, MiniLED has helped the company's performance improve and develop Xinruida has been deeply involved in the new display industry for many years. Since undertaking major miniLED technology projects in Anhui Province in 2017, the product line covers everything from traditional LED backlight modules and terminal displays, to miniLED backlight modules and direct display products, to the field of automotive displays. The 24Q1 company achieved revenue of 250 million yuan (-16.7% YoY), net profit of 40 million yuan (-9.6% YoY), and net profit without return to mother of 0.3 billion yuan (-8.4% YoY). The main reasons include showing that terminal order delivery was reduced by about 79.32 million yuan due to delays in transportation and customs clearance. Notably, benefiting from the rapid penetration of downstream MiniLED backlit TVs, Mini display module revenue increased 300% + year over year, driving the display module business to increase 22.47% year over year.
The backlight directly shows that the miniLED layout has entered the harvest period, and the miniLED backlight downstream TV output has led to a sharp rise in module volume. Since 2021, MiniLED has been one of the main technological directions driving the upgrading of TV picture quality, bucking the trend. The company takes full advantage of the early miniLED display technology layout and the advantages of being selected for major science and technology projects in Anhui Province. It has remarkable advantages in terms of R&D technology accumulation, financial strength and customer resources, and is expected to enjoy the development dividends of rapid growth in industry penetration.
MiniLED shows that “borrowing a boat to sea” is expected to contribute to increased performance. According to Lotto, MiniLED indicates that the global market size will reach $3.3 billion in 2028, with a CAGR of around 40% in 24-28. The company has formed a full range of Mini/Micro solutions from P0.3 to P1.25, and has established cooperation with leading companies in the industry to accelerate business expansion using methods such as “borrowing a boat”, which is expected to inject new impetus into performance growth.
Automotive business opens up room for growth
Accelerate the implementation of vehicle display strategies and open up a second growth curve. Since 2017, the company undertook a major miniLED technology project in Anhui Province, including in-vehicle displays as one of its strategic plans. According to the “2022 MiniLED Backlight Research White Paper” published by experts, miniLED backlight screens are expected to be shipped in 2023, and will be launched on a large scale around 2024-2025. It is expected to exceed 2.1 million units by 2026. As of March 24, 9 models have officially equipped miniLED screens. In November '23, the company plans to invest 30 million yuan to participate in Ruilong Electronics to work together to upgrade the manufacturer's supply chain level. In March '24, the company established a wholly-owned subsidiary, Wuhu Xinruida Vehicle Display Co., Ltd., which is committed to promoting the rapid implementation of the company's automotive display business. At present, the performance parameters of the 15.6-inch vehicle suspension screen version 2.0 sample developed by the company have been approved by customers, and research and development of projects in display application fields such as smart cockpits and electronic rearview mirrors is progressing in an orderly manner.
Investment advice
Revenue for 24-26 is estimated to be 15.48/21.02/2,656 billion yuan, respectively, with corresponding growth rates of 31.7%/35.7%/26.4%, and net profit to mother of 2.18/3.09/417 million yuan, respectively. The corresponding growth rates are 30.8%/41.8%/35.2%, respectively, and the corresponding PE is 17X/ 12X/9X, respectively. First coverage, giving a “buy” rating.
Risk warning
MiniLED's penetration rate fell short of expectations, industry competition intensified, raw material prices fluctuated, and the progress of new business development fell short of expectations.