Juguang Technology (688167)
Key investment points
Photon “production” + “regulation” master, four major businesses continue to expand: the company is mainly engaged in the R & D, production and sales of high-power semiconductor laser components and laser optical components upstream of the laser industry. At present, the company has four major businesses: semiconductor laser, laser optics, automotive applications (LIDAR) and optical system. It has production bases and core technical teams in Xi’an, Dongguan and Haining, China and Dortmund, Germany. It has been awarded the title of “pioneer of high-power semiconductor laser industry” by the professional Committee of laser processing of China Optical Society. In recent years, the company’s operating revenue has fluctuated and increased. 17-21q3 achieved revenue of 264 million / 355 million / 335 million / 360 million / 343 million yuan respectively, with a compound growth rate of 5.38%, of which semiconductor laser and laser optics account for the main revenue.
From upstream lasers to midstream applications, the market scale continues to expand. According to the 2020 report on the development of China’s laser industry, the global laser application market in 2019 is about US $14.73 billion. Semiconductor lasers have become the mainstream because of their high efficiency, small volume, light weight and low price. In addition to the solid-state laser, it can also be used as the direct pump source. According to strategies, the global market scale of high-power semiconductor laser components is expected to grow rapidly from US $1.98 billion in 2021 to US $2.821 billion in 2025, with a CAGR of 9.3% from 2021 to 2025. Among them, the market scale of direct application in 2021 is US $940 million, and that of solid / fiber laser pump source is US $1.04 billion. With the continuous development of “photon control” technology, the direct application scenarios of semiconductor lasers have been continuously expanded, promoting the integration with lidar, DMS, high-end industrial manufacturing, medical beauty and other industries, and the market scale has continued to expand.
Expand midstream manufacturing applications, and focus on the layout of on-board innovative application scenarios (LIDAR / DMS). The company has accumulated certain technical advantages and market position in the high-power semiconductor laser field upstream of the laser industry chain, and the product matrix is perfect. Based on the technical advantages of laser optics in the field of “regulating photons”, the company has gradually expanded the “solutions” of photons application modules and systems in the middle of the industry, including medical and health care, high-end industrial manufacturing, and focused on the layout of vehicle innovative application scenarios (LIDAR / DMS). According to our calculation, the on-board lidar market is expected to reach 18.76 billion yuan in 2025, and the CAGR will be 420% from 2021 to 2025. By 2020, the value of transmitting modules will account for about 32%. The company has corresponding product layout of transmitting modules / optical devices in various technical routes such as mechanical, rotating mirror and MEMS. The investment raised by IPO is used for the production capacity construction of optical devices and lidar transmitting modules, which is expected to significantly increase the existing production capacity and expand the sales scale of the company.
Profit forecast and investment rating: 1) continuous growth of laser optics business; 2) Medical beauty devices and modules are growing rapidly with the release of new orders; 3) Lidar business is rapidly expanding with the penetration of high-level automatic driving function; 4) The rate of various expenses continued to decline. Based on the above assumptions, we predict that the company’s revenue from 2021 to 2023 will be RMB 476 / 705 / 1226 million, with a year-on-year increase of + 32.2% / + 48.1% / + 73.9% respectively; The net profit attributable to the parent company was RMB 0.68/131219 billion, with a year-on-year increase of + 94.3% / + 93.9% / + 67.1% respectively, corresponding to EPS of RMB 0.75/1.46/2.44 and PE of 158.63/81.81/48.97 times. It was covered for the first time and given a “buy” rating.
Risk tip: the development of intelligent electric vehicle industry is less than expected, laws and regulations restrict the development of automatic driving, and the shortage of chip supply exceeds expectations.
