Audio and video solutions have ushered in a period of accelerated growth. The first driving force for growth is policy-driven. The “Notice of the State Administration of Radio, Film, and Television on Promoting the Development of High-Definition Television” encourages television stations to accelerate the high-definition transformation process. Second, competition among television stations is intensifying, and facing competition from powerful telecom operators after the integration of the three networks, television stations need to speed up the high-definition transformation process in order to enhance their competitiveness. It is expected that in the next 3 years, audio and video solutions will enter a period of accelerated growth, with a compound annual growth rate of more than 30%.
The overall domestic audio and video solution presents an oligopolistic competition pattern among the four companies: Zhongke Taiyang, Sobey Digital, Jebsen Century, and New Auto. Zhongke Taiyang, a holding subsidiary of the company, entered the earliest and leading technology, and is a leading manufacturer of overall audio and video solutions in China. It has a comprehensive solution covering all aspects of audio and video program production, editing, broadcasting, storage and management. In particular, the leading advantage of broadcast control platforms is even more obvious (accounting for nearly 50%). It is estimated that Ocean accounts for 35-40% of the overall audio and video solutions market.
The machine eye business of the subsidiary Daheng Group will become increasingly popular as the manufacturing industry upgrades and the need for fine production control. At the same time, as the financial resources of major and medium-sized cities in China continue to strengthen, demand for intelligent traffic management rises, and demand for road photography and intelligent control of traffic violations continues to rise, the company will occupy a place in Beijing's intelligent traffic monitoring investment, and there is plenty of room for future expansion into remote cities.
The semiconductor packaging business of the subsidiary Mingxin Microelectronics cooperated fully with the Japanese company NIEC to undertake the transfer of production capacity, expand production capacity while improving equipment and product grades. At the same time, a joint venture with NIEC will establish a chip factory in China to extend the industrial chain upstream and ease the bottleneck in chip supply. In the future, Mingxin's profit will increase rapidly.
Driven by rapid revenue growth and rising profitability, Taiyang's net profit will explode. Coupled with rising profits from other businesses, Daheng Technology will enter a period of rapid growth in the next 2-3 years. The EPS for 2010 to 2012 is expected to be 0.30, 0.54, and 0.76 yuan respectively. By disaggregating the valuation, the company's value range was 17.25-18.66 yuan. Give a “buy” rating.