分业务来看，1H24 光峰：1）汽车电子业务实现收入2.41 亿元，其中2Q24 实现约2 亿元收入，为纯增量贡献。我们认为光峰汽车业务高速增长，主因公司定点车型已开始量产、销售；2）影院业务实现收入2.67 亿元，我们认为主因1H24 优质片源驱动观影需求释放，公司凭借激光光源解决方案优势，增强业务发展韧性。3）专业显示业务实现收入2.01 亿元，同比基本持平，其中工程领域收入增长24%至1.24 亿元。1H24 results fall short of our expectations
Guangfeng Technology announced 1H24 results: operating income of 1.081 billion yuan, up 1% year on year; net profit to mother was 0.011 billion yuan, down 85% year on year, lower than our expectations. Corresponding to the 2Q24 single quarter, Guangfeng achieved operating income of 0.636 billion yuan, a year-on-year increase of 4%, and a net profit loss of 0.034 billion yuan to mother, changing from profit to loss year-on-year. We believe that Guangfeng 2Q24's business is under pressure, mainly due to: 1) the company actively adjusted its C-side business strategy and accelerated the clean-up of C-side inventory, which put pressure on related business revenue and gross margin; 2) The company announced in April this year that a lawsuit was initiated with GDC, and legal service expenses were about 0.018 billion yuan during the disclosure period of the semi-annual report.
According to the company's semi-annual report, Guangfeng adjusted the profit and loss of long-term equity investment during the holding period related to GDC and converted it to other non-current financial assets to confirm investment losses. Excluding related impacts, the company estimated 1H24 net profit to mother of 0.071 billion yuan, a year-on-year decline of about 6%, which is basically in line with our expectations.
By business, 1H24 Peak: 1) The automotive electronics business achieved revenue of 0.241 billion yuan, of which 2Q24 achieved revenue of about 0.2 billion yuan, contributing to a net increase. We believe that Guangfeng Motor's business is growing rapidly, mainly because the company's designated models have begun mass production and sales; 2) The cinema business has achieved revenue of 0.267 billion yuan. We believe that the main reason is that 1H24 high-quality film sources drive the release of demand for movie viewing, and the company is using the advantages of laser light source solutions to enhance business development resilience. 3) The professional display business achieved revenue of 0.201 billion yuan, which was basically the same as the previous year. Among them, revenue from the engineering sector increased by 24% to 0.124 billion yuan.
Development trends
The trend of intelligence is clear, and Guangfeng Auto's business is expected to continue to grow. According to the company's semi-annual report, Guangfeng has now received designated projects from 7 car companies. Customers include terminal brands such as Qinjie, BAIC New Energy, BYD, Huayu and Mercedes-Benz, as well as Tier 1. In addition, Guangfeng's new products are constantly being iterated. The company has released the world's first all-in-one laser headlight to achieve ALPD light modulation and color temperature adjustment. We are optimistic about Guangfeng's continued growth momentum in the automotive electronics sector, which is expected to drive the company's revenue and profit to continue to grow.
The in-depth layout of AI and AR is expected to become the driving force for future company growth. According to the semi-annual report, 1H24 Guangfeng is actively promoting the extension of laser display technology to the fields of AI terminals, AR glasses, and robots. Guangfeng now has the world's first AR optical module with over 10,000 PPI, which can meet the demand for high-definition displays. We are optimistic that AR glasses will become multi-modal AI carriers in the future, and Guangfeng has a comprehensive layout in the AR and AI fields. As of 1H24, the total number of patents granted and applied for is about 200, and there are layouts for optical waveguides and various display paths. We are optimistic that it will drive the company's medium- to long-term revenue and profit growth.
Profit forecasting and valuation
Due to the drag of Guangfeng and GDC litigation costs, compounding the C-side gross margin, we lowered Guangfeng 2024/25e EPS 32/ 22% to 0.28/0.48 yuan. The current stock price corresponds to 48.2/28.3x P/E. We maintained our outperforming industry rating and lowered our target price by 33.5% to 16.50 yuan at the same time, corresponding to 2024/25e58.4/34.2x P/E. Currently, there is room for 21% increase.
risks
The introduction and development of automotive electronics fell short of expectations; the development of new fields such as AI and AR fell short of expectations.
