\u3000\u3000 Boe Technology Group Co.Ltd(000725) (000725)
Event:
The company released the performance forecast for 2021, and it is expected to achieve an annual operating revenue of 215-220 billion yuan, with a year-on-year increase of 59% – 62%; It is estimated that the annual net profit attributable to shareholders of listed companies will be 25.7 billion yuan – 26 billion yuan, with a year-on-year increase of 410% – 416%.
Comments:
In 2021, after the longest cycle in history, the performance of the display industry reached a record high. In 2021, the semiconductor display industry continued the longest business cycle in history in the first half of the year, and the price of LCD increased significantly. Since the third quarter, due to the shortage of shipping capacity, the upward superposition of logistics costs and the decline in demand caused by the end of the preparation cycle in the downstream peak season, LCD panel prices have retreated more from the high level. Facing the structural adjustment of product price, the company has actively adjusted its product portfolio and maintained a good profit level relying on good product and customer structure and leading technical and product strength. At the same time, OLED shipments increased rapidly, and the monthly shipments exceeded 10 million for the first time in December 2021.
LCD has entered the mature stage of the industry. After the supply and demand is stable, pay attention to the incremental opportunities brought by new technologies
In terms of LCD, we believe that the new supply capacity is limited, and the LCD panel price is expected to be repaired after the logistics mitigation and the arrival of a new round of goods preparation cycle. Since LCD is still the mainstream display technology in the next 5-8 years due to its high cost performance, we are optimistic about the improvement and periodic weakening of the industry price center after this round of competition pattern optimization. At the same time, the company also has a deep layout in the new display technology, and will continue to maintain an advantageous position in the face of new incremental opportunities in the industry, such as mini led and micro led.
Profit forecast and investment suggestions
According to the public price data of the industry and in combination with the adjustment of the company’s product structure, we raised the profit forecast for 2021. It is estimated that the company’s net profit attributable to the parent company in 2021 / 2022 / 2023 is 25.9/244/30 billion yuan, corresponding to the current PE of 7 / 8 / 6x, corresponding to PB1 3 / 1.1 / 1.0, we are still optimistic about the sustainable profitability of the company as a leader in the panel industry after the improvement of the competition pattern in the future. With reference to the leading valuation of mature industries, we will give 10xpe for 21 years, corresponding to the target price of 6.74 yuan, and maintain the “buy” rating of the company.
Risk tips
The ramp up of production capacity is less than expected; The downstream market demand is lower than expected; Increased competition led to a decline in the price of products.
