Rating: BUY (maintain)
Target price: RMB10.50
Share price (14 Jul): RMB6.54
Market Cap (RMBm): 227,581.5
Up/downside: 60.6%
BOE expects a 1H21 net profit of RMB12.5bn-12.7bn, implying a rise of 1,001-1,018% yoy. The market leader is maintaining its position in semiconductor displays with the highest global display shipments and market share in 2020. We maintain BUY on the stock and a PT of RMB10.50.
2Q21 net profit sets a new record
Operating efficiency continued to improve and 2Q21 net profit exceeded expectations to reach a record high. In 2020, BOE’s display shipment volume was the world's largest, a solid advantage for the LCD leader. A recent private placement would help its rapid OLED expansion and its aircraft carrier segment is developing rapidly. Looking ahead to the mid to long term, BOE and TCL CSOT would form a duopoly. The industry's profit range would increase and it would enter a sector valuation upgrade cycle. We believe strong downstream demand and the change in the competitive structure would increase BOE’s net profit and valuation. In 1H21, it expects net profit of RMB12.5bn-12.7bn, up 1,001-1,018% yoy. We estimate 2Q net profit would have been RMB7.42bn, up 1,204.20% yoy and 43.15% qoq, beating expectations. Operational efficiency continued to improve and net profit levels reached record highs.
BOE maintains lead in LCD business as RMB20bn private placement adds to OLED
BOE is maintaining its leading position in semiconductor displays, with the highest global display shipment and market share in 2020.
(1) Enriching product categories; raising capacity advantages; improving operational efficiency: The company completed the acquisition of CLP Panda Nanjing 8.5-generation LCD production line and Chengdu’s 8.6-gen LCD production line. The shipment rate of the Beijing 8.5-gen LCD production line reached a new high while the Chongqing 8.5-gen TFT-LCD production line continued to make small products. The yield rate of its Hefei 10.5-gen line and Wuhan 10.5-gen line continues to increase, with production improvements raising the company’s competitive advantage.
(2) About RMB20bn would be approved for OLED capacity to bring new growth potential: RMB6bn of this will be invested into the 6th-gen flexible AMOLED line project in Chongqing to enhance OLED technology diversity and RMB1bn to build a 12-inch silicon-based OLED project, which could add capacity for 5.23m OLED micro displays.
Downstream demand; competitive structure change; better long-term profitability
(1) Downstream demand continues to be high and the tight supply-demand balance drives up prices of IT, TV and other products. BOE would continue to benefit from strong industry growth. (2) Looking ahead to the medium and long term, BOE and TCL CSOT would form a duopoly in the large-panel TV market, and BOE would continue to expand into the medium-sized and high-value-added OLED. This would weaken the cyclicity of the panel market. BOE should maintain its premium profits and its valuation could increase.
Valuation and risks
We are optimistic about investment opportunities brought by a long-term profit upgrade. We maintain our forecasts: we expect revenue of RMB213.7bn/236.7bn/256.9bn and net profit of 22.9bn/24.9bn/28.1bn in 2021/22/23E. We maintain our price target of RMB10.50 and our BUY rating. Risks include: fluctuating panel prices; progress of fundraising projects falling below expectations; and tech upgrades and substitution risks. Note: our forecasts are based on the company’s preliminary earnings review and subject to potential adjustments based on final semi-annual report data.
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評級:買入(維護)
目標價:10.50元人民幣
股價(7月14日):6.54元人民幣
市值(人民幣):227,581.5
上漲/下跌:60.6%
英國央行預計,2011年第一季度淨利潤為125億至127億元人民幣,這意味着同比增長1001%至1018%。這家市場領先者正在以2020年全球最高的顯示器出貨量和市場份額保持其在半導體顯示器領域的地位。我們維持對股票的買入和10.50元的PT。
2Q21淨利潤創歷史新高
經營效益持續改善,21季度淨利潤超預期創歷史新高。2020年,京東方的顯示器出貨量是世界上最大的,這對LCD領先者來説是一個堅實的優勢。最近的一次私募將有助於其OLED的快速擴張,其航母部門正在迅速發展。展望中長期,京東方和TCL CSOT將形成雙寡頭格局。該行業的利潤區間將擴大,並將進入行業估值升級週期。我們相信,強勁的下游需求和競爭結構的變化將提高京東方的淨利潤和估值。該公司預計,2011年第一季度淨利潤將達到125億至127億元人民幣,同比增長1001%至1018%。我們預計第二季度淨利潤為74.2億元人民幣,同比增長1204.20%,季度利潤增長43.15%,超出預期。經營效率繼續提高,淨利潤水平創歷史新高。
英國央行繼續保持LCD業務領先地位,OLED增發200億元人民幣
英國央行正保持其在半導體顯示器領域的領先地位,2020年全球顯示器出貨量和市場份額最高。
(1)豐富產品種類;提升產能優勢;提高運營效率:公司完成了對中電熊貓南京8.5代LCD生產線和成都8.6代LCD生產線的收購。北京8.5代LCD生產線出貨率再創新高,重慶8.5代TFT-LCD生產線繼續小批量生產。其合肥10.5代線和武漢10.5代線的成品率繼續提高,生產改進提高了公司的競爭優勢。
(2)將批准約200億元人民幣用於OLED產能,以帶來新的增長潛力:其中60億元人民幣將投資於重慶的第六代柔性AMOLED生產線項目,以增強OLED技術多樣性;10億元人民幣將投資建設一個12英寸硅基OLED項目,這將增加523萬個OLED微型顯示器的產能。
下游需求;競爭結構變化;更好的長期盈利能力
(1)下游需求持續高企,供需緊張帶動IT、電視等產品價格上漲。英國央行將繼續受益於強勁的行業增長。(2)中長期來看,京東方和TCL CSOT將形成大平板電視市場的雙寡頭格局,京東方將繼續向中高附加值OLED領域擴張。這將削弱面板市場的週期性。英國央行應該維持其溢價利潤,其估值可能會上升。
估值和風險
我們看好長期盈利升級帶來的投資機會。我們維持我們的預測:我們預計2021/22/23財年營收為2137億元人民幣/2367億元/2569億元人民幣,淨利潤為229億/249億/281億元人民幣。我們維持10.50元的目標價和買入評級。風險包括:太陽能電池板價格波動;籌資項目進度低於預期;以及技術升級和替代風險。注:我們的預測是基於公司的初步收益評估,並可能根據最終的半年度報告數據進行調整。
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