Main points of investment:
Maintain the "overweight" rating and raise the target price to 13.74 yuan. We maintain the profit forecast of 0.44 EPS 0.61 Universe 0.75 yuan for 2021-2023. With reference to the valuation level of the comparable company, the company is given 22.53 times PE in 2022, corresponding to the target price of 13.74 yuan (the last forecast is 13.37 yuan).
The company's Q3 performance exceeded expectations. Its Q3 single-quarter revenue reached 1.828 billion yuan, YOY-2.81%,QOQ+7.47%; returned to its mother net profit of 332 million yuan, YOY+8.82%;QOQ+41.02%; gross profit of 26.65%, year-on-year-1.94pct, month-on-month-0.17pct. The company gradually got rid of the negative impact of the decline in mobile phone orders for H customers, and its higher-profit vehicle display and VR and watch business started rapidly, further driving the Q3 homing net profit to achieve year-on-year growth compared with the same period last year.
The demand side of the vehicle screen is growing rapidly, and the company's business starts rapidly, which will provide huge income and profit elasticity in the future. We expect the total area of bicycle screen to increase tenfold in the next ten years. The company has a layout of "3D cover + touch screen + Sensor+ full fit + module", covering more than 70% of global vehicle brands, and the amount of fixed-point projects for Q3 cars has been further increased. We expect its 1H22 vehicle 3D curved screen production to benefit from industry demand, which is expected to increase by more than 180% compared with the same period last year.
The trend of consumer electronics business is improving, thinning business is making steady progress, and new growth points such as VR/UTG continue to emerge. With the improvement of Glory shipments and the further expansion of OVM customers, the mobile phone display module business gradually begins to recover; the demand for large-size PC/ tablets is growing steadily; at the same time, small-size VR and watch display module technology look forward to the advanced layout, consumer electronics business is expected to pick up steadily.
The overseas share of thinning business continues to increase, and some mobile terminal orders for new UTG products have been obtained and shipped in small batches, and the future benefits are expected to show gradually as the yield increases.
Risk tips. The uncertainty of trade frictions between China and the United States; the deterioration of the epidemic.
