\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 25 Boe Technology Group Co.Ltd(000725) )
Event: BOE released its report for the first quarter of 2022: Q1 company achieved an operating revenue of 50.476 billion yuan in 2022, a year-on-year increase of 0.40%; The net profit attributable to the parent company was 4.389 billion yuan, a year-on-year decrease of 16.57%; The net profit deducted from non parent company was 3.511 billion yuan, a year-on-year decrease of 23.05%.
Comments: (1) the performance of the company remained stable in 2022q1, and the gross profit margin increased slightly month on month. The leading position in the display field is stable. According to the Korean media thelec, Apple's OLED supply is expected to double this year; (2) In the first ten days of April 22, the downward trend of large-size panel price slowed down, and we believe that the price of 32 inch panel may have bottomed out. (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 performance of the company remained stable in 2022q1, and the gross profit margin increased slightly month on month.
(1) the sales performance of 2022q1 remained stable, and the net profit attributable to the parent decreased: 22q1 company realized an operating revenue of 50.476 billion yuan, an increase of 0.40% year-on-year; The net profit attributable to the parent company was 4.389 billion yuan, a year-on-year decrease of 16.57%; The net profit deducted from non parent company was 3.511 billion yuan, a year-on-year decrease of 23.05%. (2) Q1 operating costs decreased and gross profit margin increased slightly month on month. The gross profit margin of the company's sales was 21.38%, up nearly 2pct month on month; The net profit margin on sales was 6.39%, down about 2pct from the previous quarter. Among them, the sales expenses increased by 31% year-on-year, which is due to the company's acceleration of market development.
\u3000\u30002. The LCD panel cycle gradually bottomed out, and the prosperity outlook of 22q2 industry tends to be conservative.
The downward trend of LCD panel price slows down: (1) according to WitsView data, in the first ten days of April 2022, the latest price of 32 / 43 / 55 inch panel is $40 / 71 / 107, down 0% / 0% / 0.9% respectively compared with the last ten days of March 2022, and the downward trend slows down. Among them, the price of 32 inch panel has stopped falling for two consecutive months, and we think 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) With the increase of Q2 operating variables, the conflict between Russia and Ukraine and high inflation may have an impact on the demand for large-size panels, and the impact of closed management on the supply chain continues. It is expected that activities such as promotion schedule in the later stage of Q2 will inject vitality into the market.
\u3000\u30003. Downstream demand scenario expansion + competition pattern improvement, optimistic about the improvement of long-term profit center.
(1) continue to promote the "1 + 4 + n" model and accelerate the transformation of the Internet of things. The company clarified the transformation of the Internet of things into a strategic direction, further accelerated the deep integration of "display technology + Internet of things application", continued to make breakthroughs in the "screen of things" strategy, arranged a series of new growth tracks such as smart system, smart medical industry and industrial Internet, continued to improve its own value and achieve high-quality development. (2) The company shows that its leading position has been continuously consolidated, with 22q1 revenue of 50.476 billion yuan, a year-on-year increase of 0.40%, stable performance and steady improvement of market position. According to the Korean media theelec, the dilemma of the iPhone panel driven IC industry chain previously encountered by the company may be completely solved next month. Apple will supply 30 million panels this year, a double of last year. (3) Looking forward to the medium and long term, the panel industry will see a cyclical bottom, the leading position of Companies in the global large-size panel field is significant, and the valuation is expected to improve.
\u3000\u30004. Investment suggestion: under the background of industry cycle, the company's 22q1 performance remains stable, indicating that the leading position continues to be stable. At present, the downward trend of panel price slows down. We are optimistic that the improvement of competition pattern and the improvement of industry profit center will bring double rise investment opportunities for the company's performance and valuation. We expect the operating revenue to be 230.2/263.7 billion yuan and the net profit to be 23.8/26.9 billion yuan in 22-23 years, maintaining the "buy" rating.
Risk warning: panel price fluctuation; The demand is less than expected; Industrial integration is less than expected; Display technology upgrading and substitution risks, etc
