Event: the company released its 2020 results KuaiBao and the first quarter of 2021 forecast that the company expects to achieve operating income of 10.58 billion yuan in 2020, an increase of 70.76% over the same period last year, and a net profit of 257 million yuan, an increase of 132.02% over the same period last year. In the first quarter of 2021, the company is expected to achieve a net profit of 0.7 billion yuan to 100 million yuan, an increase of 411.12% and 630.18% over the same period last year. Comments: we continue to recommend the domestic LCD module leader Tongxingda, and the company has reached a strategic cooperation relationship with a number of global brand manufacturers. Stickiness is increasing, and market share is gradually increasing. At the same time, the company continues to promote intelligent, digital lean management, factory production efficiency continues to improve, profitability has increased significantly. With the release and optimization of production capacity and product structure, it will continue to drive the company's performance growth.
1. The performance of the whole year of 2020 is bright, and the performance of the company in 2020 is outstanding in the first quarter, and the quality of profits is high. It is expected to continue to benefit from the prosperity of the industry in 2021. In 2020, the company achieved a net profit of 257 million yuan, an increase of 132.02% over the same period last year. In a single quarter, 2020Q4 realized a net profit of 86 million yuan, an increase of 132.43% over the same period last year, a decrease of 2.27%. In the first quarter, the company continued to achieve a net profit of 0.7-100 million yuan in the first quarter, an increase of 411.12%, 630.18% and-18.60%, 16.28% respectively. The company's performance growth is mainly due to 1) the deep-seated, high-viscosity high-quality key customer system fully ensures the two-way sustained growth of revenue and profitability; 2) product structure optimization and management empowerment. Downstream customers are actively stocking, and the prosperity of the industry continues to improve.
At the same time, product application areas and scenarios continue to infiltrate, in addition to widely used in smartphones, in new energy vehicles, drones, smart wear areas are gradually expanding and showing a good growth trend. At present, the company has established long-term and stable cooperative relations with major customers, such as oppo, vivo, Xiaomi, Samsung, Chuanyin, Lenovo, TCL, DJI, etc., with sufficient orders, sufficient production capacity and visible sustainability of future growth.
2. LCM: has sufficient production capacity and perfect product structure. In the past 19 years, the company has built a high-end LCD module production line in Ganzhou, increased the proportion of high-end products, and invested in the construction of an annual output of 60 million pieces of special-shaped comprehensive screen two-in-one display module project, which will benefit from 1) 21 years downstream customers actively stock. 2) the shortage of panel-driven IC + the increase in the price of display panel, which shows that the price of module products has increased; 3) the market share of customers has increased + panel customers have been put into production:
In 19 years, the global market share of HMOV, the company's end customer, reached 40%. At the same time, the company's panel customers are mainly BOE, Qunchuang Optoelectronics and so on, of which BOE's global market share reached 18.9% in 19 years, and a number of production lines were put into production in 20 years.
3. CCM: continues to import display module customers, the company has benefited from market expansion, sufficient orders, biometric modules and other products have been mass produced, and invested in the establishment of Nanchang camera module factory with an annual production capacity of 48 million. Through the introduction of LCD module customers, the company camera module production line is full, and plans to add new production lines, then the monthly production capacity will increase from 16kk to 22kk, the future will benefit from: 1) multi-photo-driven demand: 2) high-definition drive unit price rise; 3) 3D sensing is a new trend of development.
Investment suggestion: the company is expected to make a net profit of 4.50 yuan and 541 million yuan for 21-22 years, maintain the target of 34 times PE for 21 years, give the target price 65.30, and maintain the "buy" rating.
Risk tips: increased competition in the industry; product research and development is not as expected; downstream demand is lower than expected; performance KuaiBao, forecast are preliminary accounting results, based on annual report, quarterly report disclosure data shall prevail
