\u3000\u3000 Boe Technology Group Co.Ltd(000725) (000725)
Key investment points
Event: the company released the performance forecast for 2021, with an estimated revenue of 215-220 billion yuan, an increase of 59% – 62% over the same period of last year; The net profit attributable to shareholders of listed companies was 25.7-26 billion yuan, an increase of 410% – 416% over the same period of last year; The net profit after deducting non recurring profits and losses was 23.79-24.09 billion yuan, an increase of 791% – 802% over the same period of last year. The company’s performance improved significantly compared with the same period of last year, and its profitability increased rapidly, which was in line with expectations.
Driven by cycle + growth, it shows the rapid growth of business, and the “1 + 4 + n” business group promotes the strategic transformation of the Internet of things. In 2021, the company’s performance increased rapidly, mainly because the panel industry continued the longest business cycle in history in the first half of the year. Although the panel price was corrected due to demand adjustment in the second half of the year, relying on its leading position in the LCD industry, the company actively adjusted its product structure to respond to the correction of panel price and maintained a good profit level; In terms of OLED, the company cooperates closely with customers and the shipment volume increases rapidly. At the same time, the company’s “1 + 4 + n” business group, with semiconductor display business as the core and sensors and solutions, mled, intelligent system innovation and intelligent medical engineering as the booster, has continued to deepen the transformation to the Internet of things and enhance the market competitiveness.
Benefiting from the improvement of capacity supply and market competition in the LCD industry, the company’s profit center and the ability to control production and price have been improved. At present, LCD is the most mainstream display panel, and the capacity supply accounts for more than 90%. Due to its advantages of low working voltage, low power consumption and mature technology, it is expected to remain the mainstream of the global market for some time in the future. Starting from 2022, with the full liquidation of Samsung LCD panel production line, the global LCD panel production capacity will be further concentrated in land plants. As an industry leader, the company’s ability to control production and price and profit center are expected to be improved. At the same time, the company adheres to the optimization of product structure, and its profitability is expected to continue to strengthen.
The company’s OLED shipments to major mobile phone customers are expected to significantly reduce losses. OLED panel is currently in the stage of rapid development due to its light weight, strong flexibility and other advantages, and the proportion of shipments is increasing year by year. In 2021, the company’s OLED realized the introduction of mainstream mobile phone brand customers, and the shipment volume of major customers in the United States increased to about 10%. In 2022, the company’s share of major customers is expected to increase to more than 20%. The third phase of B12 production line in Chongqing also plans to extend its OLED application field from mobile phones to it and vehicle. The company’s OLED scale and global market share are expected to further expand.
Profit forecast and investment suggestions. From 2021 to 23, the company’s operating revenue is expected to be 217.71/222.35/248.84 billion yuan respectively, and the net profit attributable to the parent company is expected to be 25.86/232.4/26.43 billion yuan respectively. Considering the leading position of the company in the panel industry, the company is given a PE valuation of 11 times in 2022, corresponding to the target price of 6.60 yuan, maintaining the “buy” rating.
Risk warning: repeated epidemic risk; The risk that the ramp up of production capacity is less than expected; Lower downstream demand than expected risk
