We hosted BOEVx at CMBI Technology Corporate Day on 26 Jun. Overall, mgmt. expects larger and high-end displays remain the major upgrade trend and BOEVx is well positioned to benefit given its industry leadership position. Mgmt. guided overall sales growth to outperform the market and NPM recovery on track in FY24E driven by ASP hikes, better operating efficiency, overseas orders and rapid growth of system products. Trading at 6.5x/5.7x FY24/25E (1-sd below avg.), we think the stock's risk-reward is attractive. Maintain BUY with TP of HK$10.94 based on 15x FY24E P/E.

Large displays and high-end display products to drive ASP/NPM recovery; system biz maintains high growth. Mgmt. believes large displays, high-end displays and more complex modules remain the major upgrade trends, and reiterated guidance of 8%+ YoY sales growth, outperforming the industry average of 4% YoY. Specifically, mgmt. expects high-end products (Oxide/LTPS/OLED) to achieve 200%+ YoY growth with a rising sales contribution in FY24E. In addition, mgmt. stated overseas demand for high-end products is rapidly growing, and is positive on large displays and high-end products to drive ASP upside and NPM recovery. For system business, mgmt. guided 100%+ YoY growth in FY24E with sales contribution to exceed 5%/5- 10% in FY24/25E. Mgmt. also expects overseas market will achieve double-digit growth on overseas project wins.

? Chengdu plant update: full capacity of 15mn+ pieces/month; Expect UTR to recover on a stabilising market in 2H24E. Mgmt. shared latest updates on Chengdu plant progress and key highlights include: 1) the plant is now running at full capacity with over 15mn pieces/month; 2) no new depreciation added to the plant; 3) 1H24 UTR is less than 100% due to production line shifting to small and rush orders (rather than demand slowdown) and mgmt. expects UTR to recover once the market stabilizes in 2H24E.

NPM expected to recover in 2H24E; Maintain BUY. Overall, while macro weakness and customers' order slowdown will weigh on 1H24E profit, we expect margin recovery in 2H24E given less domestic capacity investment, better operation efficiency at Chengdu plant, ASP upside and more order wins on Parentco support. Maintain BUY and our TP of HK$10.94 is based on 15x FY24E P/E.