\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 25 Boe Technology Group Co.Ltd(000725) )
Event:
The company released its annual report for 2021, with an operating revenue of 219310 billion yuan in 2021, a year-on-year increase of 61.79%; The net profit attributable to the parent company was 25.831 billion yuan, a year-on-year increase of 412.96%; The net profit attributable to the parent company after deduction was 23.938 billion yuan, an increase of 796.38% year-on-year.
Comments:
2021q4 maintained growth, and the intensive advantage leveled the impact of price reduction
In 2021, Q4 company achieved an operating revenue of 56.031 billion yuan, a year-on-year increase of 37.83%; The net profit attributable to the parent company was 5.816 billion yuan, a year-on-year increase of 127.19%, continuing a good growth trend. The gross profit margin and net profit margin of 2021q4 were 19.63% / 8.75% respectively, which decreased month on month due to the decline of LCD panel price. The proportion of innovative products in Beijing’s generation 5 LCD production line has made a new breakthrough. The yield of FHD products in Hefei’s generation 10.5 production line has reached a new high in the industry, and other industries are in good operation. The company ranks the top two among 28 core LCD customers and the first among 24. Subsequently, as the price of LCD panel tends to stabilize, the company is expected to take advantage of intensive advantages to strengthen the leading position of LCD industry and obtain stable profitability.
OLED production capacity construction was steadily promoted, and the monthly shipment exceeded 10 million for the first time
The company’s shipments of flexible OLED panels increased rapidly, and the monthly shipments exceeded 10 million for the first time in December 2021. From the whole year of 2021, AMOLED output and sales volume were 855 / 836000 square meters respectively, with a year-on-year increase of 59% / 67% and a production and sales rate of 98%. OLED production capacity is rapidly released, the operation quality of the 6th generation AMOLED production lines in Chengdu and Mianyang has been steadily improved, and the 6th generation AMOLED production line in Chongqing has successfully achieved mass production and delivery. As a new growth pole of the industry, OLED panel capacity construction helps the company improve penetration in small-scale fields such as smart phones and smart watches and develop new growth engines.
Profit and investment forecast
Due to the continuous pressure on the price of LCD panel, we expect the revenue of 22-23 years to be 183742196937 billion yuan respectively (the original value is 203857/209569 billion yuan), and the net profit attributable to the parent company to be 16.831/24.160 billion yuan respectively (the original value is 24.378/29.959 billion yuan). At the same time, we also increase the 24-year profit forecast revenue to be 202686 billion yuan, the net profit to be 26.365 billion yuan, the EPS to be 0.44/0.63/0.69 yuan / share, and the corresponding PE to be 10 / 7 / 6 times respectively. Considering the short-term profit pressure does not change the company’s long-term competitive advantage, 12 times PE is given for the profit forecast in 2022, the target price is 5.25 yuan, and the “buy” rating is maintained.
Risk tips
The ramp up of production capacity is less than expected; The downstream market demand is lower than expected; Increased competition led to a decline in the price of products.
