BOE A released its 1Q24 performance forecast: The company achieved net profit of 800 to 10 billion yuan in Q1 of 2024, an increase of 223-304% over the previous year; net profit after deducting non-return to mother was 466-660 million yuan, turning a year-on-year loss into a profit.
Key points of investment
Global semiconductor display leader, stable leading position in the industry
In terms of semiconductor displays, the company's overall LCD and five major application areas continued to rank first in the world in 2023. The product structure was continuously optimized, superior high-end flagship products continued to break through, and oversized products achieved the highest global shipment volume. ADS Pro products have achieved a breakthrough in the high-end TV market; in the OLED field, flexible AMOLED has outstanding competitive advantages, the profitability of mature production lines has improved significantly year-on-year, and the first 8.6th generation AMOLED production line in China has been built. Flexible AMOLED is expected to become a new performance growth point for the company in the future.
The LCD business has entered a new cycle, and the profit of the old OLED production line is expected to improve throughout the year from 2023. As supply-side LCD production capacity in Japan and South Korea is almost cleared and **** manufacturers cut production, the global large-scale LCD panel pattern is concentrated on mainland Chinese manufacturers, and the panel industry begins a new order. In 2024, the Q1LCD panel demand side was affected by sporting event stocking demand and high price increase expectations, and end customer orders were released early; the supply side always followed the “on-demand production” strategy. February was affected by the Spring Festival, and the operating rate remained low. The March order release was boosted, and the operating rate increased rapidly; in terms of price, the price of TV products rose across the board from February, and the increase further expanded in March. On the OLED side, with the further penetration of OLED screens in mobile phones and the increase in the share of high-end folding machines, we expect the company to achieve the high annual shipment target of 160 million flexible OLED screens in 2024, and the profit situation of the company's old OLED production line is also expected to improve further.
The comprehensive layout of the “1+4+N+ Ecological Chain” highlights the company's active use of the industry's leading advantages, focusing on the four high-potential waterways and driving directions, and focusing on promoting high-quality development: IoT innovation, sensing and smart medical businesses are developing rapidly; MLED business is rapidly improving, collaboration and integration of upstream and downstream resources is constantly being strengthened, forming strategic cooperation with customers in key industries such as Shanghai Film, etc., and achieving the initial layout of the Asia-Pacific and European markets; the high-dive waterway is expected to become a new revenue booster. At the same time, the company continues to promote the transformation of the Internet of Things, with remarkable results in market expansion. The operating quality of TV terminals continues to improve. For the first time, MNT terminal shipments rank among the top three in the world; IoT application terminals remain the world's largest in the whiteboard, splicing, and advertising machine segments; for the first time, shipments of whiteboard devices have risen to number one in the world, and market influence continues to increase.
Profit forecasting
The company's revenue for 2024-2026 is 1978.58, 2160.62, and 234.348 billion yuan, respectively, and EPS is 0.11, 0.22, and 0.29 yuan, respectively. Considering the reversal of the panel industry cycle and growth brought about by the company's voice and new technology development as a leading global display industry, it was covered for the first time, giving it an “increase in weight” investment rating.
Risk warning
Downstream demand falls short of expected risks, Japan and South Korea's production capacity withdrawal is slower than expected risk, OLED volume falls short of expected risk, diversified development falls short of expected risk, etc.