According to the company's three-quarter report, the operating income in the first three quarters was 2.335 billion yuan, an increase of 24.75% over the same period last year; the net profit of return to the mother was 497 million yuan, up 33.85% over the same period last year; and the amount of non-recurrent profit and loss was 221 million yuan, of which the amount of government subsidy was 273 million yuan. Deducting non-return net profit of 277 million yuan, an increase of 25.14% over the same period last year. In the third quarter, the company achieved operating income of 713 million yuan, an increase of 5.03% over the same period last year; net profit of 184 million yuan, up 18.24% over the same period last year; and net profit of 85 million yuan, down 8.91% from the same period last year.
Core ideas:
The LED& semiconductor business grew steadily in the first three quarters, and the Q3 single quarter product structure adjustment was affected. The company's LED chip production capacity in the first three quarters increased greatly compared with the same period last year, and the production and sales rate remained at a high level. Q3 single quarter due to the comprehensive upgrading of white LED products and increased investment in innovative products such as Mini LED and Micro LED, resulting in a certain loss of revenue and profits, gross profit margin fell slightly to 34.5% (Q2 is 37.28%), at the same time, the inventory of white light products rose to 1.238 billion yuan at the end of the quarter, Q4 is expected to gradually recover; at the same time, due to the continued devaluation of the RMB, the company's US dollar debt brought a loss of nearly 20 million in the Q3 single quarter.
Release a fixed increase plan of 2.1 billion yuan to invest in LED innovation & semiconductor project: the company released a fixed increase plan in October, which intends to raise no more than 2.1 billion yuan for investment in white LED, Mini/Micro LED development and production line expansion projects, MEMS inertial sensor development and industrialization projects. The company is expected to realize the industrialization of white LED and Mini/Micro LED, and lay out the next generation display technology in depth; at the same time, its wholly-owned company Mexin Semiconductor is the world's leading MEMS enterprise, which is expected to localize the core general new sensors and gyroscopes and reduce its dependence on the import of high-end foreign sensors.
LED industry margin continues to improve, the company fully benefited: in the short term, the current mainstream LED chip prices have gradually stopped falling, only flip, high-power and other subdivision products have a small price reduction; affected by inventory and prices, the production expansion progress of some manufacturers will slow down, and the industry margin is expected to continue to improve. In the long run, LED downstream applications are blooming at many points, and the demand for corresponding LED chips is expected to maintain a high growth rate; at the same time, with the transfer of LED chip production capacity to the mainland, the industry concentration is significantly increased, and the company is expected to fully benefit from the rapid growth and concentration of the industry.
Profit forecast and investment advice: the annual return net profit of the company in 18-19-20 is expected to be 7.2max 9.5 / 1.25 billion yuan respectively, and the corresponding PE is respectively times that of 16-12-9. The company's high LED performance growth + plans to acquire Mei Xin to start a new journey in the sensor field, we are optimistic about the future development of the company, give "buy" rating, continue to recommend.
Risk tips: production expansion progress is not as expected; LED chip price change risk; downstream customer order change risk.