The readings of this report are as follows:
The company's on-board display business, which has been laid out for many years, has ushered in a rapid outbreak, which has become a new driving force for sustained high-quality growth. At the same time, watches, VR/AR display modules and folding screen UTG will also drive the continued growth of consumer electronics business.
Main points of investment:
Maintain the "overweight" rating and raise the target price to 13.37 yuan. The company's car layout for many years shows that it catches up with the wave of smart cockpit outbreaks and maintains a profit forecast of 0.44 EPS 0.61 plus 0.75 yuan for 2021-2023. With reference to the valuations of comparable companies PE and PB, the target price is raised to 13.37 yuan.
A different understanding. The market is lack of understanding of the changes in the company's business structure, and it is still stuck in consumer electronic touch display modules such as mobile phones, believing that the follow-up growth is weak. We believe that due to the outbreak of demand for the on-board screen, the development progress of the on-board display is faster than expected, and it is expected that the revenue share of the on-board display will increase from 40% in 2021 to 2022. 60% of the revenue is expected to exceed 70% in 2023; as the undervalued smart cockpit touches the leader, the vehicle business will bring the company a double-click valuation.
The rapid growth of demand for vehicle screens will provide the company with huge revenue and profit elasticity in the next five years. The total screen area of bicycles is expected to increase tenfold from 2020 to 2030. The company has formed a "3D cover + touch screen + Sensor+ full fit + module" integration capability, breaking through the global first-line car factories and Tier1 manufacturers, with a global share of about 18% in 2020. The company is actively expanding production, and the production capacity of 1H22 vehicle 3D curved screen is expected to increase by 185% compared with the same period last year, which will benefit most from the outbreak of demand in the industry.
Consumer electronics companies actively layout VR/AR, UTG and other new displays, there are many growth points in the future. The company's VR business layout is forward-looking, providing FB with new Quest2 display modules and developing high-generation products with Micro-LED, while actively expanding PICO and other customers. Folding screen mobile phone ultra-thin glass (UTG) industry leader has shipped in small quantities and obtained new product orders from some mobile phone terminal customers; the company has carried out high-level business cooperation with display giants to jointly expand the foldable mobile phone market, and the scale of UTG business is expected to expand gradually.
Risk tips. The shortage of automotive chips is increasing; the uncertainty of trade friction between China and the United States