\u3000\u3 Guocheng Mining Co.Ltd(000688) 383 Shenzhen Xinyichang Technology Co.Ltd(688383) )
Event overview
On May 16, 2022, TCL released q10g miniled series TV. Q10g miniled series TV has 1000nits ultra peak brightness, adopts 448 partition micron dot matrix light control design and is equipped with a new generation of leading chip M1. In terms of price, the initial prices of 85 / 75 / 65 / 55 inch new products are 12999 / 8499 / 6499 / 4499 yuan respectively. The price has a strong impact compared with OLED TV. We believe that miniled TV is expected to usher in a new round of penetration improvement. On April 26, 2022, the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the company achieved a revenue of 1.197 billion yuan, a year-on-year increase of 69.90%, and a net profit attributable to the parent company of 232 million yuan, a year-on-year increase of 115.78%. In the first quarter of 2022, the company achieved a revenue of 351 million yuan, a year-on-year increase of 74.27%, and a net profit attributable to the parent company of 709107 million yuan, a year-on-year increase of 84.00%.
Analysis and judgment
Mini led penetration speed, the company will continue to benefit from the development of the industry. Mini LED display technology is the mainstream development trend in the future, with significant performance advantages. Samsung, TCL, Huawei and other manufacturers have successively released Mini LED products, with strong demand in the downstream market. The increase of mini led penetration rate has an obvious driving effect on the demand for solid crystal equipment. According to the 2021 annual report, the company’s Mini led solid crystal machine achieved an operating revenue of 200 million yuan, a year-on-year increase of 421.87%, and the gross profit margin reached 66.32%, which is much higher than the traditional LED solid crystal machine, which promoted the overall gross profit margin of the company to 42.63%. The company will continue to benefit from the development of mini LED industry by virtue of its long-term and stable cooperative relationship with many well-known downstream manufacturers and its industry-leading technical advantages.
Epitaxial merger and acquisition of welding line business, semiconductor equipment ushered in a wave of domestic substitution. According to the 2021 annual report, the company’s semiconductor solid crystal machine achieved an operating revenue of 215 million yuan, a year-on-year increase of 890.23% and a gross profit margin of 46.08%. In addition, the company acquired kaijiu automation to extend the welding line business. At present, the welding line machine accounts for 23% in the field of packaging equipment, which is higher than the scale of solid crystal equipment, but the degree of localization is less than 20%, and there is a wide space for domestic substitution. The company plans to launch led and semiconductor wire bonding machines within this year, which is expected to break the monopoly of overseas enterprises and realize the collaborative sales of solid crystal and wire bonding equipment. The company’s semiconductor welding line equipment has been in the customer verification stage, and its performance is expected to continue to improve.
Sustained high-intensity R & D investment to stabilize and improve core competitiveness. The company continues to strengthen R & D investment, further enhance the company’s comprehensive strength and core competitiveness, and consolidate and improve the company’s leading position in the industry. In 2021, the company invested 764999 million yuan in R & D, an increase of 55.19% over the same period last year, with 265 R & D personnel. The company has carried out independent research and development on some core parts of intelligent manufacturing equipment products.
Investment advice
Maintain the “buy” rating. Considering the negative impact of the epidemic on the demand side and the supply side, we adjusted the net profit attributable to the parent company in 202224 to RMB 286 / 374 / 491 million, with a year-on-year increase of 23.2% / 30.9% / 31.2%, corresponding to EPS of RMB 2.80/3.67/4.81, and the PE valuation in 22-24 years was 33.12/25.30/19.28 times. As the global leader of miniled solid crystal equipment, the company has rapid development of new business, further optimization of product structure and promising growth in the future.
Risk tips
The downstream demand of miniled is less than expected, and the localization substitution of semiconductor equipment is less than expected
