Event: on April 29, 2021, the company released its 2020 annual report and first-quarter 2021 earnings report. In 2020, the operating income was 10.601 billion yuan, an increase of 71.10 percent over the same period last year, and the net profit was 258 million yuan, an increase of 133.37 percent over the same period last year. The operating income in the first quarter of 2021 was 2.671 billion yuan, an increase of 59.08 percent over the same period last year, and the net profit was 101 million yuan, an increase of 637.06 percent over the same period last year.
Comments: we continue to recommend the domestic LCD module leader Tongxingda, the company has reached a strategic partnership with a number of global brand manufacturers, stickiness continues to increase, market share increases gradually; at the same time, the company continues to promote intelligent and 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 that the industry will continue to benefit from prosperity in 2021.
In 2020, the company achieved a net profit of 258 million yuan, an increase of 133.37% over the same period last year. In a single quarter, 2020Q4 achieved a net profit of 87 million yuan, an increase of 133.71% over the same period last year, and a month-on-month decrease of 1.51%. The company's new products through fund-raising projects are mainly 5-7 inch COG/COF special-shaped national screen full-fitting display modules. In addition, the sales scale of the company's camera module continues to rise, and its profitability continues to enhance, which has become an important level of the company's profit growth.
At the same time, product applications 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, Yin, Lenovo, TCL, DJI, with sufficient orders, sufficient production capacity, and visible sustainability of future growth.
2. In 2021, the company continued its high demeanor and promoted the capacity release plan to continue the year 2020 in the first quarter, with a net profit of 101 million yuan in the first quarter, an increase of 637.06% over the same period last year, and an increase of 15.94% over the previous year, exceeding the upper limit of the performance forecast. At the same time, the company's net operating cash flow increased steadily, an increase of 296.39% over the same period last year. In 2021, the company will continue to accelerate the "special-shaped comprehensive screen two-in-one display module project" and the "Ganzhou Jinfengmei Garden new capacity expansion project" to speed up capacity construction and promote capacity release. At present, the company's downstream customers are actively restocking, panel-driven IC shortage + display panel prices rise, showing module product prices rising, multi-photo demand rising, high-definition driving up unit prices, etc., the company's hands-on orders are growing steadily, with Nanchang camera module base and Ganzhou LCD module base high-end equipment production line, continuous improvement in production capacity, the company is expected to achieve sustained and rapid growth.
Investment suggestion: the company's 21-22 net profit is expected to be 4.50 yuan and 541 million yuan, giving the target price 65.30 yuan and maintaining the "buy" rating.
Risk tips: production expansion is not as expected, downstream prosperity is not as expected, and product structure optimization is not as expected.
