Laser display topic: from following to leading, industrialization opens up incremental space

Analysis of the overall situation of the industry

Laser display has become the mainstream, technological progress has promoted the localization of the industrial chain, and the cost and price of products have been reduced. In September 2021, the global laser display forum confirmed that laser display is one of the next generation mainstream displays. In terms of supply, overseas has the first mover advantage, but China has caught up and changed from a follower to a leader. Under the technological breakthrough, it is expected that the localization degree of laser industry chain will increase from 45-55% to 75% - 80% in the next 3-5 years, driving the decline of cost and terminal retail price, and improving the C-end popularity of laser. From the perspective of products, C-end laser display products mainly include laser TV that has existed for many years and laser intelligent projection recently launched. The former has high price and better performance and is used to replace LCD TV. The sales ratio of the two in 2021h1 is about 9:1. Cost reduction has a positive impact on both.

For laser TVs, localization drives cost reduction and volume reduction. The global sales CAGR is expected to be as high as 68% from 2021 to 2024. Compared with LCD TV, laser TV has the advantages of high price, large screen, good image quality, eye protection and easy access, but the high unit price restricts its popularity. China has made breakthroughs in the research and development of the four major parts of laser TV to varying degrees. Localization and scale effect will drive the cost and volume reduction of laser TV. Hisense expects the cost in 2024 to be 40% lower than that in 2021, and we conservatively estimate that the retail price will be reduced by 26%. Under the condition of price reduction and large volume, the sales volume in domestic and foreign markets is expected to increase to 1 million and 650000 units in 2024, and the CAGR will reach 68% in three years.

For intelligent projection, in the future, laser and LED light sources will present a pattern of dislocation competition to meet the diversified needs of users and jointly expand the intelligent projection market. Projection light sources mainly include bulbs, LEDs and lasers. Among them, LED has good effect and low cost. 88% projection is used, but its brightness is slightly inferior. Laser has the advantage of high brightness to make up for the lack of LED brightness, but monochrome fluorescent laser technology has the problem of weak image quality, which is difficult to completely replace LED light source. With the improvement of laser technology, the development of LED and laser will be dislocation competition, driving the synchronous development of products in the two directions of cost performance and high-end, promoting the industry to cover more consumers and driving the rapid growth of scale. According to our calculation, in 2021, the laser shipment only accounts for 1.31% of the intelligent projection. The "brighter" advantage of laser is prominent, and new products occur frequently. Under the low base, the growth rate of laser light source in the future is expected to be higher than the overall growth rate of intelligent projection.

Investment advice

With the progress of laser display technology, we are optimistic about the long-term development of laser display industry and give a rating of "stronger than the market". Among them, the core of enterprises to stand out is to maintain technology leadership, supply chain management and control advantages and brand influence. Key recommendations: ALPD ® Inventor Appotronics Corporation Limited(688007) , micro throw faucet capable of self polishing machine Chengdu Xgimi Technology Co.Ltd(688696) , it is suggested to pay attention to the leader of three-color laser display technology Hisense Visual Technology Co.Ltd(600060) .

Risk tips

The progress of localization and large-scale cost reduction was less than expected, the price of upstream parts fluctuated rapidly and sharply, the panel price decreased rapidly, and the epidemic situation repeatedly affected production and sales.

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