Event: the company issued a half-year performance forecast for 2021, and 2021H1 expects to achieve a net profit of 2.3-250 million yuan, an increase of 178.64% and 202.87% 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. We continued to achieve high growth in the first half of the year, and successfully expanded the global well-known customer 2021Q2 in a single quarter. The company achieved a net profit of RMB 1.29-149 million, an increase of 86.96%, 115.94% and 27.86%, respectively, compared with the same period last year. It is mainly due to the continuous increase of the company's market share and the smooth progress of the company in cost optimization and capacity expansion strategy. In terms of customers, it has successfully expanded the world's well-known tablet computer customers; in addition, the company has further enriched the field of product applications and has become the main supplier of the leading domestic drone brands, driving the continuous growth of the performance of the optical camera group.
Product application areas and scenarios continue to infiltrate and increase, and future performance can be expected to continue to grow. In addition to being widely used in smart phones, it is gradually expanding and showing a good growth in the fields of new energy vehicles, drones and smart wear. 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. Improve the management level of the factory and improve the profitability significantly.
The company continues to promote the overall management level of the factory in accordance with the route of "factory intelligence, digitization and IT", and creates a high-end intelligent factory with standardized management, timely delivery, reliable quality and controlled cost. in the first half of 2021, the advantages of high-end intelligent factories continue to be brought into full play, and the production efficiency and product yield of the factory are in the leading level in the industry. the increase of product efficiency and the decline of cost have brought about the enhancement of profitability. It is optimistic that the company's cost control ability will continue to improve and its profitability will continue to enhance in the future.
3. Continuous release of production capacity to enhance the company's profitability and core competitiveness the company expanded the high-end production line of OLED smart wear and medium-and large-size touch display modules in 2020 to further enhance the company's advantages in scale and technological innovation, constantly enhance the company's profitability and core competitiveness, and bring new growth points for the company's profits. We believe that in the future, the company will continue to benefit from 1) 21 years of downstream customers actively stock; 2) customer market share increase + panel customers put into production: 19 years, the company's end customers HMOV global market share of 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.
Investment advice: due to the smooth customer expansion and capacity release, the company's 21-23 net profit forecast for 21-23 will be raised from 450 pound 541 million yuan to 500 pound 6.5 million yuan to 848 million yuan, corresponding to a valuation of 12.34 pm 9.48 and 7.28, with a low valuation and a target price of 65.30 yuan, maintaining 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 forecasts are preliminary accounting results, subject to the data disclosed in the official report.
