I. Overview of events
The company issued a draft of restricted stock incentive, which is intended to grant 22.45 million shares, accounting for 1.81% of the total share capital, and 18.01 million shares of category II restricted stock, accounting for 1.45% of the total share capital, for the first time, with a grant price of 6.63 yuan.
II. Analysis and judgment
The core staff motivation is in place, the unlocking goal shows the company's confidence, and the performance inflection point now covers the senior management team and the core technical staff of 314 people, and the core staff is bound in place. The incentive is unlocked for three times, and the unlocking target is that the company's net profit from 2021 to 2023 is not less than 100 million yuan, 200 million yuan and 400 million yuan respectively, demonstrating the management's confidence in future growth. The estimated amortization expenses of this incentive for 21-23 years are 0.75,0.49 and 21 million yuan respectively. The company's operating performance reversed at the bottom, and the Q3 inflection point was clear. since 2020, the company has actively promoted the adjustment of product structure and the optimization of industrial development layout by virtue of its leading R & D advantages. at the same time, benefiting from the rebound of the industry in 2020, the company's 2020Q3 has achieved a bottom reversal of operating income of 740 million yuan, year-on-year + 4%, month-on-month + 21%, and net profit from-40 million yuan of Q2 to 10 million yuan of Q3. In addition, the company plans to raise 1.5 billion yuan to invest in Mini/Micro LED and the third-generation semiconductor GaN R & D project to open up long-term development space.
Mini/Micro LED will provide growth momentum for the chip faucet. Mini LED backlight improves the performance of LCD while it has the advantages of cost and life compared to OLED. A large number of new products with Mini LED backlight and Mini/Micro LED direct display will be released in 2020. it is estimated that by 2023, the global Mini LED backlight market will reach 530 million US dollars, and the Mini LED direct display market will reach 640 million US dollars. After two years of decline, Mini LED/Micro LED, which has broad development prospects, will provide a strong driving force for the leader of the LED chip industry. At present, leading enterprises have established barriers to technology, scale and customer resources in the field of Mini / Micro LED, which will further improve the concentration of the industry.
III. Investment suggestions
The company has been deeply engaged in the field of LED chips for many years, and now plans to raise funds for the further development of mini/micro LED and GaN devices, in which mini/micro LED backlight and direct display market is the future development direction, and GaN devices have a broad market space in fast charging, radio frequency and other fields. It is estimated that the company's income in the year 20-22 will be 100 million yuan in 30-33-37, and the net profit will be 0.2 billion yuan, 190 million yuan, corresponding to the valuation of 931-97-61, with reference to the latest valuation of 55 times of SW Electronics on 2021-1-26. Considering that the Mini/MicroLED market is in a period of growth and the company has broad market space, we think it is undervalued and maintain the "recommended" rating.
Fourth, risk tips:
The control of the epidemic is not as expected, and the sales of major customers are not as expected.
