Event: Chi Chi Technology issued a forecast of results for the first half of 2021. The company expects 21H1 to achieve a net profit of 63 million yuan to 70 million yuan, an increase of 60.52% to 78.36% over the same period last year. 21H1 is expected to achieve a non-net profit of 56.8 million yuan to 63.8 million yuan, an increase of 99.61% and 124.21% over the same period last year. The overall operating performance of 21H1 company has increased steadily, and the overall sales revenue has increased by about 55% compared with the same period last year. Solar backpanels and composite films have further increased the market share, and the income has increased rapidly compared with the same period last year. The loss of exchange at the profit end is about 5 million and the provision of equity incentive fees has affected the profit performance to a certain extent, but the volume of high-end products has brought continuous optimization of product structure, and the trend of profitability improvement remains unchanged. At the same time, the investment layout continues to promote horizontal expansion.
The off-season of 21Q2 is not weak, and the upward trend continues. The company's 21Q2 expects to achieve a quarterly revenue of about 466 million yuan, an increase of 56.66% over the same period last year and 22% month-on-month growth. The net profit returned to the mother reached 30.48 million yuan to 37.48 million yuan, a year-on-year growth rate of 43% to 76%, with a median month-on-month increase of 4.5%. 21Q2 expects to achieve a non-net profit of 26.78 million yuan to 33.78 million yuan per quarter, a year-on-year growth rate of 107% to 161%. Under the influence of "lack of core and less screen", income continues to grow high, we judge that the upward trend of the company's performance is expected to continue, and the alleviation of chip shortage in the future is expected to further catalyze performance flexibility.
High demand for high-end optical film, the company continues to break through production capacity, seize the growth opportunity. Benefiting from the strong demand for terminals, the demand for optical films in China is on the rise. In 2021, many terminal manufacturers take advantage of the efforts to promote the Mini LED display to start the first year of commercialization. At the beginning of the outbreak of downstream demand, the demand for high-end optical films will continue to grow. Through continuous process improvement and production improvement, the company strengthens cost control, while seizing the opportunity of penetration of high-end display technologies such as quantum dots and Mini-LED, actively developing high-end, with significant market share advantages. In the next three years, the company will continue to enhance the production capacity of high-end optical films such as composite films, quantum dot films and small-size brightening films, and the improvement of product structure and the release of superimposed economies of scale will promote the gradual optimization of product structure and steadily improve profitability.
Photovoltaic backplane has significantly benefited from the high prosperity of the photovoltaic industry, layout packaging film and backplane film coordinated development. The upsurge in the photovoltaic industry has led to a surge in demand for photovoltaic backboards such as TPO and photovoltaic packaging film. The combined market share of POE film and EPE film increased by 11% to 25.5% in 2020 compared with the same period last year, and will continue to rise in the future. The company's photovoltaic backplane has passed including Jingke, Longji and other certification and mass production delivery, new product production and sales are prosperous, capacity expansion continues to promote. At the same time, we will raise 200 million yuan to build a photovoltaic packaging film production base, which is expected to coordinate the development and strengthen the advantages of the industrial chain, and further enhance the competitive position of the photovoltaic track.
The multi-point layout of foreign investment redevelops the business territory, and the functional membrane platform enterprises are taking shape day by day. The company has previously invested in the layout of optoelectronic display (PET base film, OLED luminous material, LCP material, silicon-based OLED micro display, etc.), automobile (window film, decorative film, etc.) and other fields. Recently, it was announced that the newly established wholly-owned subsidiary Anhui Jizhi, the holding subsidiary Tianyuan New Materials (53%) and the subsidiary Ningbo Jiyang (60%) Xiangshan Jiyang, a wholly-owned subsidiary, respectively focus on solar packaging film, adhesive products, optical glue and solar photovoltaic materials, will further improve the photovoltaic display and photovoltaic industry chain, accelerate strategic layout, and shape new profit growth points in the future.
Profit forecast and investment advice: Chi Chi Technology is a domestic leader in display optical films, which now shows the leading global position of thin films and the steady growth of high-end optical films. New products such as solar backplane films are expected to benefit from industry development and technology upgrading dividends to achieve rapid development. We expect the company to achieve a revenue of 2.251kg 2.7373.439 billion yuan in 2021-2023. Realize the net profit of 2.02 pounds, 319 pounds, 485 million yuan. At present, the corresponding PE is 32.9x/20.9x/13.8x from 2021 to 2023, maintaining the "buy" rating.
Risk tips: intensified market competition, display technology update iteration, profitability is not as expected.
