\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 25 Boe Technology Group Co.Ltd(000725) )
Event: BOE released its annual report for 2021: (1) in 2021, the company realized an operating revenue of 219310 billion yuan, 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 deducted from non parent company was 23.938 billion yuan, with a year-on-year increase of 796.38%. (2) At the end of 2021, the total assets of the company were 449727 billion yuan and shareholders' equity was 216873 billion yuan.
Comments: (1) the company's performance in 2021 reached a record high, the net profit deducted from non parent company increased nearly eightfold, the leading position in the display field was stable, and the AMOLED shipment exceeded ten million for the first time in December 21; (2) In March 22, the decline in the price of large-size panels narrowed, and the price of 32 inch panels may have bottomed out. Looking forward to the future, the adjustment of panel manufacturers' production rate & product structure may become the main determinant of panel price trend. We believe that the price of 22q2 panel is gradually stabilizing. (3) Looking forward to the long term, the downstream demand scenario of the panel is expanded + the competition pattern is improved. The company has significant leading advantages. It is optimistic about the improvement of the long-term profit center, which shows that the leader is sailing.
\u3000\u30001. The company's annual performance in 2021 reached a record high and its net profit increased significantly.
(1) 2021 showed the best performance in history, and the net profit deducted from non parent company increased nearly eightfold: during the reporting period, the company realized an operating revenue of 219310 billion yuan, 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 deducted from non parent company was 23.938 billion yuan, with a year-on-year increase of 796.38%. (2) In the first half of the year, the LCD industry was booming, and the company's gross profit margin increased month on month. In the 21st year, the combination of H1 housing economic stimulus and capacity shortage promoted the prosperity of LCD industry, and the company's gross profit margin increased from 28.13% in Q1 to 33.96% in 2q21. (3) In the second half of the year, the demand of LCD industry slowed down and the gross profit margin of Q4 decreased. In the 21st year, H2's global economic slowdown and the rise of raw material costs affected the willingness of downstream goods preparation, and the company's gross profit margin fell from 33.55% in Q3 to 19.63% in Q4.
\u3000\u30002. The price of 32 inch panel may have bottomed out, and the price of 22q2 panel is expected to stabilize.
The decline of LCD panel price narrowed: (1) according to WitsView data, in late March 2022, the latest price of 32 / 43 / 55 inch panel was $40 / 71 / 108, down 0% / 1.4% / 1.8% respectively compared with late February 2022, and the decline narrowed. Among them, the price of 32 inch panel has stopped falling for two consecutive months, and the price may have bottomed out. (2) Looking back on this round of panel price cycle, the panel price rebounded from the bottom in May of 20 years, and rose continuously for nearly 13 months to June of 21 years, with an average increase of more than double, of which the price of 32 inch panel increased the most (175%). Since July of 21, the panel price has loosened, accelerated the decline from August to October, and continued to narrow after November. At present, the price of 32 inch panel may have bottomed out. (3) Looking forward to the future, the adjustment of panel manufacturers' production rate & product structure may become the main determinant of panel price trend. We believe that the decline of 22q2 panel price is expected to continue to converge and stabilize.
\u3000\u30003. Downstream demand scenario expansion + competition pattern improvement, optimistic about the improvement of long-term profit center.
(1) "1 + 4 + n" mode helps the business layout of the Internet of things, and the scene development has achieved remarkable results. In 2021, the company's "1 + 4 + n" mode Internet of things innovation business expanded, enriched a number of screen display application scenarios, and achieved a revenue of 28.379 billion yuan, a year-on-year increase of 47.98%. (2) The company shows that its leading position has been continuously consolidated, with a revenue of about 202219 billion yuan in 21 years, a year-on-year increase of 64.30%. The market position was further steadily improved. The product sales volume increased by 9% year-on-year and the sales area increased by 37% year-on-year. AMOLED shipments increased rapidly, and the monthly shipments exceeded 10 million for the first time in December 21. (3) Looking forward to the medium and long term, the periodicity of the panel industry may weaken, the leading position of Companies in the large-scale field of global TV is significant, and the valuation is improved.
\u3000\u30004. Investment suggestion: under the background of industry adjustment, the company's performance in the whole year of 21 exceeded expectations, showing a prominent leading position. At present, the decline of panel price narrowed, and the price of 22q2 is expected to stabilize. We are optimistic that the improvement of competition pattern and the improvement of industry profit center will bring investment opportunities for the double rise of company performance and valuation. Considering the change of panel price, we adjusted the operating revenue of 22-23 years to 230.2/263.7 billion yuan (original value 2007 / 217.8 billion yuan), and the net profit to 23.8/26.9 billion yuan (original value 248 / 29.4 billion yuan), maintaining the "buy" rating.
Risk warning: panel price fluctuation; The demand is less than expected; Industrial integration is less than expected; Display the risks of technology upgrading and substitution.
