\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 703 Sanan Optoelectronics Co.Ltd(600703) )
Key investment points
Compound semiconductor capacity expansion, business or usher in substantial growth.
As a leading and comprehensive enterprise in the field of third-generation compound semiconductors in China, the company achieved a major breakthrough in revenue in 2021, with a year-on-year increase of 129.15% and a sales revenue of 2.231 billion yuan. In the future, with the release of production capacity of Quanzhou San’an, the product delivery capacity will be greatly improved, and the revenue of compound semiconductor business may be significantly improved.
Micro / mini led layout, direct growth in the market. The field of high-end lighting is the development direction of the LED industry in the future. The company has made a comprehensive layout in advance. At present, it has entered into in-depth cooperation with major international customers such as S004 and a006. With the release of production capacity in San’an, Hubei Province, the profitability of mini / microled may continue to grow in the future.
With the recovery of traditional lighting and the layout of emerging industries, the company’s performance will lead to a new round of growth.
The traditional LED lighting business ushered in a recovery in 2021. As a global leading enterprise of LED chips, the company has strengthened its advantages after the low ebb period of the LED industry, and will deeply benefit from the industry recovery in the future. The layout of emerging application fields such as plant lighting LED, vehicle led and UV (ultraviolet) led widened the growth space of the company, improved the market profitability and further improved the gross profit margin of products.
Profit forecast and valuation
After years of technology accumulation, the company has focused on the layout of compound semiconductor business and increased investment in emerging application fields such as LED. With the revenue expansion of compound semiconductor and emerging industries in the future, it will effectively improve the gross profit margin of the company’s products and then improve its profitability.
We estimate that the company’s revenue in 2022, 2023 and 2024 will be 17.9 billion yuan, 25 billion yuan and 35.1 billion yuan respectively, and the net profit attributable to the parent company will be 188.7 billion yuan, 306.3 billion yuan and 446.5 billion yuan respectively, corresponding to 0.42/0.68/1.00 yuan of EPS and 49 / 30 / 21 times of PE. It will be covered for the first time and given a “buy” rating.
Risk tips
Led demand is not expected; International market development and delivery are not as expected; The company’s capacity expansion was less than expected.
