Summary of the report
The king of transformation, focus on optics, develop multi-level products, and create a vertical industrial chain. Ou Feiguang is a leading company in the optics and optoelectronics industry, with a global market share of about 10%, ranking fifth and China ranking first.
Oufeiguang's main products have been switched from infrared filters and touch screens to camera modules since 2012, and have quickly become a leader in the industry by virtue of its superior technical strength and management ability. it has achieved good results as the fastest growing company in the global camera module industry in 2018. After divesting the Android touch business in 2019, the company has further focused on camera modules, forming a stable pattern of optoelectronic, microelectronics and smart car products, which will dig deep into optics and accelerate the expansion of biometrics and smart cars in the future. lead the industry innovation.
The financial burden and impairment brought about by the exposure of non-performing assets and changes in North American customers have been divested and dealt with. The risks such as the company's finance and North American customer business changes have been basically released, and the business has further focused on the optical racetrack. After the complete divestiture of the touch business and the transfer of assets of specific overseas customers, the company no longer has any business baggage. In the future, we will concentrate on working deeply in the related fields of various mobile terminals, new energy vehicles, and 5G couplet new applications, a state that Oufeiguang is best at in the past decade. With the release of inventory price loss in the past three years, it has returned to the normal level, and the net interest rate has also been improved. The level of ROE is expected to rise in the future. The fixed increase project of 6.8 billion yuan will also greatly ease the financial pressure of the company, and the company's finance and operation will be a big step higher than in the past two years.
High-end technology strengthens the optical moat, and automotive electronic relay opens trillions of markets. The company is one of the few companies in the industry that can mass-produce multi-camera modules, 3D modules and off-screen ultrasonic fingerprint recognition modules. the company plans to continue to develop high-end markets, including 6x7p lenses and smart cars. The lens is the upstream link with the highest gross profit margin, and the company has realized the lens self-supply of 2Accord 3, which greatly increases the flexibility of the company's profits. In terms of overall production capacity and customer channel supply, the company is also in a leading position in China. At present, the average camera usage and imaging area of a single mobile phone are still increasing. The amount of lens modules used in automotive electronics will continue to grow with the continuous development of self-driving and car intelligence in the future. Although it is a pity that the supply chain was removed by North American customers because of force majeure, we believe that Apple Inc's supply chain brings a lot of halo to Ofeiguang, and also confirms the technical strength of Ofeiguang lens module. at present, Ofeiguang partners still have HMOV, Samsung Electronics, LG Electronics, Geely Automobile, Changan Automobile and so on. Ofeiguang will no longer put all hope on a single enterprise in the future, which may not be a rebirth of Nirvana. A good opportunity to improve the physique of the enterprise.
Profit forecast and rating: cover for the first time and give buy rating. Oufeiguang has been on the market since 2010, and its performance in the first seven years is commendable, achieving a compound growth rate of 48.4%. Sales have grown from 1 billion at the beginning of listing to the current scale of 40 to 50 billion, and the market capitalization has also reached more than 70 billion from less than 3 billion from the starting point in 2012. on the whole, it is still a component head enterprise worthy of attention. Although in the past few years, due to some non-performing assets and legacy problems, including the unreasonable list of entities of the US Department of Commerce, there have been two sudden performance adjustments, which have reduced the market's trust in Ofeiguang to a freezing point, but in essence, this is not the subjective behavior of listed companies, and there is a certain degree of helplessness in natural and man-made disasters. After these two years of integration and divestiture and handover, the group level has gradually emerged from the waves, which will make the company more comfortable in the next business development: the remaining problems will be cleared, and the company's finance and operation will be higher than those in the past two years. The current market capitalization of about 20 billion should be a new starting point for the rebirth of ou Feiguang. We estimate that the company's profits from 2021 to 2023 are 245 million, 1.174 billion and 1.676 billion respectively, and the current market capitalization is 82.78,17.26,12.09 respectively.
Risk tips: (1) the continuous impact of the epidemic has an impact on both the industry chain and the demand side. The spread of the global epidemic affects the production and supply of the electronic industry chain, while the macroeconomic recovery is not as expected, which will lead to a decline in mobile phone shipments.
(2) the trade dispute intensified, and the commercial use of 5G was lower than expected. Although 5G has been gradually launched and the construction of domestic 5G base stations is accelerated, due to the uncertainty of the international situation, foreign 5G construction may slow down, which has a negative impact on consumer electronics sales. In addition, the international trade war against Huawei, if not slowed down, led to a decline in Huawei's mobile phone shipments, which in turn affected the company's sales.
(3) the penetration speed of multi-shot and 3D technology is not as fast as expected. Although mobile phone manufacturers use cameras as the highlight of the game, if Apple Inc reduces the use of multiple modules and 3D deep lenses, it may hinder continuous innovation downstream.
(4) the company's production expansion is not as expected. The company's scheduled increase in the first half of this year will mainly focus on lens and 3D module research and development and production expansion, if the construction schedule is not completed on schedule, it will affect the company's profitability.