(Report Producer/Author: Great Wall Securities, Zou Lanlan, Zhang Yuanmo)
1. Demand side: the main focus of hardware entrepreneurship, Mini LED cut to the market outlet
Mini LED refers to LED chips with dimensions of 50-200 microns, mini LEDs can be used in the field of backlighting and direct display. Mini LED backlight is an upgraded version based on the traditional LED backlight, and it is also the best replacement for micro LED development. Compared with the traditional LED backlight, the LED chip used in the Mini LED backlight has smaller particles, a finer display effect, higher brightness, and more power saving than OLED, and supports accurate dimming, avoiding the problem of uneven backlighting of ordinary LED. Compared with Micro LEDs, Mini LEDs have higher yields, lower costs, and clear advantages in mass production.
In 2021, Mini LED ushered in the first year of large-scale commercialization, and the global panel and electronic product terminal giants have launched products using Mini LED backlighting. According to Arizton data, the global Mini LED market size will grow from US$150 million in 2021 to $2.32 billion in 2024, with a CARG of 149.2% from 2021 to 2024. The domestic Mini LED market size will grow from 1.6 billion yuan in 2019 to 40 billion yuan in 2026, and carg will be 58.4% in 2019-2026.
Compared with traditional displays, Mini LEDs display more delicate and brighter. The technical indicators of Mini LED backlit display are mainly divided into height, contrast, color gamut, OD (optimal distance) value and so on. In terms of brightness, the scattered Mini LED can achieve high brightness (> 1000nit); in terms of contrast, the Mini LED can achieve ultra-high contrast (1000000:1) through fine Local Dimming; in terms of partitioning, the traditional straight down backlight is dominated by the hundred-level partition, and the Mini LED backlight jumps to the thousand-level partition. In terms of OD value, the OD value of ordinary TV is about 20~30mm, while mini LED TV can achieve 0 OD.
From the observation of the progress of products on the market, large manufacturers at home and abroad continue to launch new Mini LED backlight products, and the promoters cover the whole machine manufacturers and LCD display manufacturers. Mini LED backlight has become a major consensus for the innovation and development of the display industry. In the LCD display link, BOE uses glass-based AM drive technology to release 75-inch, 86-inch TV backlight products, 34-inch display backlight products, and P0.9 display products to achieve the world premiere. TCL also recently released the X11 series of Collar QD-Mini LED smart screen TVs equipped with Mini LED backlight display technology. Among them, the flagship TCL X11 65-inch version / 75-inch version / 85-inch version is priced at 13999 yuan / 17999 yuan / 27999 yuan, respectively. The flagship TCL X11 uses Mini LED panel and QLED technology to support 2304 partitioned quantum dot light control, and is equipped with 576 backlight driver chips, which comprehensively improves image quality contrast and fineness. In addition, TCL QD-Mini LED's strategic goal is to have more than 60% QD-Mini LED penetration in TCL's large-size sales volume in the next three years. TCL continues to carry out strategic layout in high-end Mini LED TV, which is expected to drive the rapid development of the Mini LED industry.
In the whole machine link, Apple, Huawei, Samsung, Lenovo, Hisense and other terminal manufacturers have increased their Mini LED investment efforts, have launched the corresponding Mini LED display products, their products throughout the PC, Pad, TV, VR, automotive and other fields, Mini LED products in the whole machine end of the rapid penetration.
At present, Mini LED backlight has become a breakthrough in the LCD industry, an important technology upgrade track for traditional LCD displays, and has become the next growth point of the LED industry. At present, the Mini LED backlight market has officially started, from the downstream application distribution point of view, TV and laptop market will vigorously promote the expansion of Mini LED demand. Taking Mini LED backlit TV as an example, according to LEDinside statistics, the overall shipment of TVs in 2021 is 210 million units, of which Mini LED TV shipments are 2.1 million, of which Samsung shipments are 1.5 million units, and the penetration rate of domestic Mini LED TVs has huge room for improvement. Secondly, the automotive and VR markets also have sufficient room for development.
2. Supply side: the industrial chain has the advantage of mass production, and the glass-based solution is more imaginative
Mini LED backlight industry chain is born from the traditional LED backlight industry, which is an upgrade of the traditional LED backlight industry. At present, the relevant manufacturers of the upstream chip, midstream package to the downstream display of the industry chain have laid out Mini LED, Mini LED in terms of production capacity, technology, products and other aspects gradually mature, Mini LED mass production process continues to accelerate.
The penetration speed of Mini LEDs mainly depends on the balance between technology and cost, which plays a key role in the market expansion of Mini backlights. Mini backlight costs are mainly determined by: the cost of the substrate (the more partitions, the denser the wiring, the more possible layers), the chip cost (the more partitions, the more LED chips and driver chips), manufacturing costs, yields and future maintenance costs. Among them, the backlight substrate, manufacturing cost, and liquid crystal panel account for a higher proportion of the cost.
From the chip side, the current Mini backlight chip end yield, consistency, and cost control have basically matured, still have a large cost exploration space, the package end is also expanding to a more efficient, high yield, low cost technology. From the manufacturing side, as the Mini LED industry chain continues to mature, the scale effect brought about by the significant increase in shipments will effectively reduce manufacturing costs. From the perspective of Mini LED chips, chip manufacturers are accelerating production expansion, and the capacity release effect will gradually appear in 2022. On the mainland, Sanan Optoelectronics, HC Semitek, Zhaochi Shares, Aoyang Shunchang Optoelectronics, Jucan Optoelectronics, Qianzhao Optoelectronics and other companies have increased their investment in the mini LED field and steadily promoted the expansion plan related to mini LED backlighting; in Taiwan, manufacturers represented by Fucai have also landed capital expenditure plans for Mini LED.
At present, chip manufacturers are gradually overcoming technical difficulties, chip efficiency and yield are rising together, and the production cost of upstream links is expected to continue to decline. The core space of Mini LED chip cost reduction is not entirely in materials and processes, but when the industrial exponential scale grows, it is easier to achieve cost reduction targets by converging products to a few adaptable solutions. In addition, the package end is also expanding to a more efficient, high yield, low cost technology. With the continuous growth of order volume, packaging plants are actively expanding production, such as Guoxing Optoelectronics' Nanzhuang Geely Industrial Park Project, Ruifeng Optoelectronics' Mini/Micro LED Hubei Production Base Project, And Hongli Zhihui's Mini LED Phase II Park. At present, the growth rate of Mini LED production capacity of packaging companies has remained at a high level.
Mini LED backlight costs 20% of the machine, and 50% of the cost of the backlight panel lies in the PCB. From a global perspective, most PCB manufacturers have laid out Mini LED PCB substrates, including domestic PCB companies such as Pengding Holdings, Aoshikang, Zhongjing Electronics, Shenghong Technology, etc., and Taiwanese enterprises Xinxing, Taiding, Tongtai, and Yongfeng of South Korea. At present, the domestic PCB industry chain is relatively mature, with sufficient technical and production capacity preparation, which provides strong support for the rapid growth of Mini LED.
According to the different packaging substrate materials to distinguish the MniLED technology path, the current Mini LED technology path includes PCB solution and glass-based solution. Among them, PCB is a commonly used LED substrate, with mature technology, low cost and other advantages, mainly by the LED industry chain manufacturers to promote the use. The glass substrate is one of the key materials of LCD, and the glass-based Mini LED is the leading force for the promotion of panel factories. In terms of cost, PCB packaging mainly uses double-layer boards, and is currently mainly imported. In the future, with the localization of high-end PCB materials, the system cost of PCB solutions is expected to decline. However, as the final product is partitioned, the more PCB layers are used, which also increases the overall cost. The glass substrate scheme mainly uses lithography technology to engrave the line directly on the glass substrate, and the one-time input cost such as the lithography mask plate is higher, while the cost is lower after the scale application.
In terms of performance, PCB thermal conductivity is low and heat dissipation performance is poor, and it is easy to warp and deform in large sizes. The glass substrate has high thermal conductivity and heat dissipation. In addition, the glass-based flatness is higher, making it easier to break through the chip transfer technology than pcBs. The disadvantage of glass-based is fragility, which is currently lower than PCB yields. In terms of application prospects, the PCB-based solution is the mainstream technology path of domestic manufacturers at present, and has been adopted by most LED manufacturers. Due to its own cost, performance and other advantages, the glass-based solution will gradually exert its own advantages in the future and have full market potential. (Source: Future Think Tank)
3. Industrial chain tracking: the prosperity continues to rise, and capital expenditure is on the rise
Taking the electronics industry in Taiwan as an observation point, the prosperity of Mini LED continues to rise, and the expansion of capital expenditure highlights the industry's recognition of the development direction of Mini LED. From the perspective of the industrial chain companies involved, the leading LED chip in Taiwan achieved revenue of NT$1.81 billion in February 2022, an increase of 74.11% year-on-year and -12.81% month-on-month. The company is currently establishing a 4-inch Mini LED chip production line with an annual production capacity of 300,000 pieces, and the 4-inch Mini LED backlight is expected to increase from 1 million pieces in 21 years to 1.5 million pieces. In addition, Jingdian invested NT$610 million to purchase the Zhunan plant in preparation for the mass production of Micro LED in 2 to 3 years.
Taiwan Yiguang's annual revenue in 2021 was 25.028 billion yuan, an increase of 15.86% year-on-year, a new high in nearly 4 years since 2018, mainly due to the strong increase in demand for the company's main products such as infrared, optocoupler, invisible light, and Mini LED-related packaging components/modules last year. In terms of Mini LEDs, the company will expand the introduction of downstream applications in 2021, and it is expected that the overall shipment scale will maintain double-digit growth in 2022. In addition to the accelerated growth of the original TV and notebook screen panel backlight demand, automotive Mini LED related products are also expected to increase. In addition, the company is currently working with North American label customers on new Mini LED backlights.
The main business of Taiwan Surface Adhesive Technology Co., Ltd. (Taiwan Watch Division) includes the procurement and management of raw materials and accessories, the process design process, the SMT assembly process, quality assurance, logistics management and after-sales service. In the Mini LED field, he is mainly responsible for the packaging business. In 2021, the revenue of the Taiwan Watch Division was 65.72 billion yuan, an increase of 58.72% year-on-year, and the net profit after tax was 3.713 billion yuan (NT$), an increase of 69.26% year-on-year, a record high. In February 2022, the company's revenue was 5.81 billion yuan, an increase of 73.6% year-on-year, and the cumulative revenue of the first two months reached 12.11 billion yuan, an increase of 70.9% year-on-year, a new high in the same period of the calendar year, mainly due to the lack of materials affected by the lack of materials in the second half of last year, and the kinetic energy continued to this year. The company, which primarily assembles Apple's iPad Pro and MacBook Pro, has combined shipments of 8.5 million units in 2021 and is expected to ship up to 15 million units in 2022. Mini LED revenue accounted for about 25% in 2021, and it is expected that this year, under the gradual easing of external unfavorable factors and the expected launch of new products by customers, the production capacity can reach full capacity, and the revenue proportion is expected to increase to 30%. In terms of production capacity, in 21 years, the table section has a total of 210 SMT production lines, and it is expected to increase by about 10 in 22 years, and the company will focus on developing more Mini LED customers, and the company's expected performance will grow rapidly under the trend of continuous improvement in Mini LED demand and the growth of memory business.
Longda Electronics Co., Ltd. (Longda Electronics) main business includes the production of light-emitting diode LEDs, covering crystal, grains, packaging, is the only vertical integration of upstream, midstream, downstream process to lighting product applications in the LED industry in Taiwan, one-stop production enterprises. In the Mini LED field, he is mainly responsible for chip production and packaging business. In February 2022, Ronda's revenue was NT$374 million, down 16.66% year-on-year and 27.84% sequentially, and cumulative revenue for the first two months of 2022 was NT$893 million, down 11.37% year-on-year. At present, the company Mini LED has begun to deliver to panel customers, the American brand pushed out mini LED backlight related applications, guided the non-Apple camp to join the design, 21Q4 significantly expanded production, new production capacity has been delivered to customers at 22Q1. The company's invisible LED products have expanded their production capacity by 3 times in 21 years, accounting for about 30% of revenue, and will expand their production capacity by 50% in 22 years.
Fucai Investment Holdings Co., Ltd. (Fucai) was established by the two major LED groups in Taiwan, Jingyuan Optoelectronics and Ronda Electronics, with its main business covering epitaxial wafers, chips, packaging and modules, and its product application scope covers display screens, professional lighting, automotive, sensing, 5G communications, power and other applications. In the Mini LED field, he is mainly responsible for chip production. In 2021, Fucai's operating income was 36.425 billion yuan (NT$), an increase of 53.7% year-on-year, gross profit margin of 20.9%, an increase of 18pct year-on-year, and a net profit of 1.898 billion. The significant increase in revenue was mainly due to the demand for backlights driven by the epidemic, the demand for high-end red light was strong, and Mini LEDs began mass production in 2021. In 2021, Mini LEDs account for about 25%-20% of the total revenue of Fucai, and it is expected that the proportion will reach 30% in 2022. In terms of production capacity, it is expected that the new capacity of 2022Q2Mini LED will be in place, and the Mini LED capacity can be increased by 50%. In terms of capital expenditure, capital expenditure in 2022 was about 5.5 billion yuan, including the subsidiary Jingdian announced on the 3rd that it would purchase a new plant of 610 million yuan. In 2022, the Mini LED market penetration rate will further expand, and Fucai, as the leader in the Mini LED industry, will continue to drive the company's performance growth with capacity expansion and Mini LED new product release.
4. Investment Analysis
4.1 Vogel Optoelectronics
The company takes the FPD photoelectric glass thinning business as the core, extends to the downstream anti-static ITO coating, cutting and other businesses, at present, can provide customers with thinning, anti-static ITO coating, cutting and OGS chemical secondary strengthening and other services, with vertical integration advantages. After 2018, the company's main products include photoelectric glass, photoelectric display thin film devices, flat panel displays and other electronic devices.
From 2018 to 2021, the company achieved operating income of 7.00, 5.24, 6.04 and 1.050 billion yuan respectively, and in 2018-2021, the company achieved net profit attributable to the mother of 1.58, 0.51, 0.14 and -0.27 billion yuan. In 2021, the company achieved operating income of 1.05 billion yuan, an increase of 73.79% year-on-year; among them, the photoelectric glass finishing business achieved sales revenue of 683.7424 million yuan, an increase of 21.49% year-on-year; Mini LED new product research and development income of 2.6824 million yuan. In terms of net profit, the net loss of Vogue Optoelectronics in 2021 was 26.8629 million yuan. The loss in 2021 is mainly due to the company's increased investment in research and development, production, sales, management and other aspects. In 2021, the company invested 51.224 million yuan in research and development, an increase of 60.5% year-on-year, accounting for 4.88% of operating income.
The company is accelerating its footprint in Mini/Micro LED products, primarily for Mini LED direct display and backlight products, with glass substrate products. The company has lit Mini LED glass-based direct display products and 15.6-inch, 75-inch backlight samples, and is currently cooperating with Konka, Lehman, Hilda, TCL and other enterprises to develop related products. In February 2022, the company increased its 1.65 billion yuan construction of Mini/Micro LED substrate production projects for glass substrates, accelerating the progress of mini/Micro LED business. Recently, the company set up a subsidiary of Jiangxi Dehong Display Technology Co., Ltd. with 180 million yuan to promote the orderly development of the project. With the accumulation and upgrading of traditional LCD photoelectric glass finishing, the company has achieved a leading layout and obvious technical advantages in the field of glass-based Mini LEDs. In the future, the company is expected to fully benefit from the outbreak of Mini LED applications and continue to improve profitability and industrial chain status. It is estimated that the company's net profit attributable to the parent in 2022-2024 will be 0.69/1.12/160 million yuan, the EPS will be 0.56/0.91/1.30 yuan, corresponding to the PE of 22/23/24 of 32X, 19X and 14X, respectively.
4.2 Hongli Zhihui
The company is a key high-tech enterprise of the National Torch Plan, as a leading white LED packaging enterprise in China, mainly engaged in the research and development, production and sales of LED devices and their application products, and the products are widely used in general lighting, backlight, automotive signal/lighting, special lighting, special lighting, display screens and many other fields. The company's main business includes LED semiconductor packaging business, LED lighting business two major sectors.
In the first three quarters of 2021, the company's main revenue was 3.061 billion yuan, up 45.28% year-on-year; net profit attributable to the mother was 217 million yuan, up 242.35% year-on-year; deducted non-net profit was 179 million yuan, up 382.59% year-on-year; the company expects to achieve net profit attributable to shareholders of listed companies in 2021 of 253 million yuan - 293 million yuan, an increase of 172.65% -215.76%; and achieve deduction of non-net profit of 200 million yuan - 240 million yuan, Year-on-year increase of 267.82%-341.39%. The substantial increase in the company's net profit benefited from the insistence on "focusing on the main business, integrating and improving efficiency", and the recovery of LED market demand.
The company began to lay out the Mini/Micro LED display field in 2018. In terms of products, mainly from the Mini LED backlight source, Mini LED direct display two directions layout; in terms of production capacity, in June and December 2020, the company and the Guangzhou Huadu District Government signed an investment agreement to invest in the construction of Mini LED new display project Phase I, Phase II project, after full production is expected to total annual output value of 4.6 billion yuan. Thanks to the company's comprehensive efforts in the Mini LED project, Hongli Zhihui has made good progress in the layout of mini LED field. The company's first phase of the project has been successfully put into production in December 2020, and the second phase of the project has been successfully capped in December 2021. With the increase in Mini LED orders and the gradual release of production capacity, the company's Mini LED business is expected to grow rapidly. The company focuses on the main business of LED packaging, the production capacity and technology in the field of Mini LED packaging are in the industry leading, is expected to benefit from the mini LED industry demand explosion, driving the company's performance to improve significantly, it is estimated that the company's net profit attributable to the mother in 2022-2023 is 537 million yuan, 607 million yuan, EPS is 0.53 yuan, 0.76 yuan, 0.86 yuan, and the corresponding PE is 16X, 11X, 10X, respectively.
4.3 Jufei Optoelectronics
Founded in 2005 and listed in 2012, the company is a leading white LED packaging enterprise in China, mainly engaged in the research and development, production and sales of LED devices and their application products, which are widely used in general lighting, backlight, automotive signals /lighting, special lighting, special lighting, display screens and many other fields. The company's products are mainly divided into three categories, namely LED packaging, LED automotive lighting business, Internet marketing business cloud smart chips and acceleration cards and intelligent computing cluster systems.
The company's total revenue in 2021 reached 2.371 billion yuan, an increase of 0.86% over 2020, and the net profit attributable to the mother was 272 million yuan, down 10.93% from 2020. In 2021, the company's total assets were 4.956 billion yuan, down 0.01% from the same period of the previous year; the owner's equity attributable to the shareholders of the listed company was 2.891 billion yuan, an increase of 15.93% over the same period of the previous year; and the net assets per share attributable to the shareholders of the listed company increased by 10.35% over the same period of the previous year. In 2021, the company as a whole is operating steadily. Affected by global politics, economy and the epidemic, the company's traditional product market is under great pressure, resulting in a decline in comprehensive gross profit margin. In 2021, the company increased the construction of R&D platforms in the three places, while investing more in the research and development of new products and new technologies, and the net profit fell compared with the same period. On the other hand, with the rapid development of automotive intelligence and the promotion of the national 5G+8K ultra-high-definition display strategy, the company's automotive LED and Mini LED and other new products have grown rapidly, providing strong support for the company's performance.
In terms of Mini LED, the company focuses on both backlight and direct display business, and the large supply of Mini LED backlight is TV application products, including TCL Huaxing. The market acceptance of direct display products is also increasing. Due to the high overlap between Mini LED customers and traditional product customers, the large viscosity and the company's emphasis on technological innovation and the stability of product performance, and has sufficient own funds to cope with the development and expansion of new products, the company is expected to gain a high market share during the rapid rise of Mini LED products.
4.4 Ruifeng Optoelectronics
Founded in 2000, the company is a world-renowned L ED packaging solution and product provider that develops, produces LED light sources and provides application solutions. Technological innovation, technological leadership and product differentiation are the core competitiveness of Ruifeng Optoelectronics. The company has established in-depth business and strategic cooperative relations with many first-line brand enterprises around the world. The company's products are mainly divided into lighting LEDs, medium and large size backlight LEDs, other LED devices and so on. At present, the company will focus on R&D and business layout in the fields of Mini LED, Micro LED and AI sensing devices.
In the first three quarters of 2021, the company's operating income was 1.098 billion yuan, an increase of 24.97% year-on-year; basic earnings per share were 0.0941 yuan, an increase of 19.57% year-on-year, and the company expects the net profit attributable to shareholders of listed companies in 2021 to be 90 million yuan to 115 million yuan, an increase of 87% to 139% year-on-year; Net loss after deducting non-recurring gains and losses was $0 million to $14 million, compared to a profit of $4,422,400 for the same period last year. In 2021, the company's operating income continued to grow, and the total gross profit also increased compared with the same period last year; At the same time, the company continued to increase investment in Mini LED research and development, and actively expanded sales, resulting in an increase in related expenses. In 2021, the company's operating income continued to grow, and the total gross profit also increased compared with the same period last year; the impact of non-recurring profit and loss on net profit was about 115 million yuan, mainly due to the government subsidy revenue recognized during the reporting period.
At the time of the mini/micro LED expansion tide, the company successfully promoted the landing of the expansion project. On the one hand, the company completed a non-public offering of 699 million yuan in May 2021, which was invested in mini LED and RGB LED expansion projects. On the other hand, the company further officially implemented the construction of the Hubei manufacturing base in July 2021 and announced the start of the Mini/Micro LED new display industry project. The first phase of the company's Hubei Mini/Micro LED base project is expected to have a total investment of about 1.5 billion yuan, the construction content covers the full-color LED packaging expansion project, mini LED backlight packaging production project, Micro LED technology research and development center project, is expected to form a production capacity after full production: full-color LED packaging products 10105KK only / year, Mini LED backlight packaging products 6.63 million pieces / year, and will build and operate the Micro LED technology research center.
4.5 Dry photoelectric
Founded in 2000, the company mainly produces full-color ultra-high brightness LED epitaxial wafers and chips, high-performance gallium arsenide solar cells, LED lighting products, and provides energy-saving lighting application solutions. The first phase of the company's Nanchang production base has reached full production, and has completed a comprehensive layout of general lighting products, high-voltage products, filament products, high-efficiency products, backlight products, flip-up products, Mini/Micro LED products, and display chip products. In the field of display chips, the company has developed a variety of Micro LED chip products, and developed a huge amount of transfer prototype technology, on the basis of which micro LED display samples were prepared, and cooperated with upstream and downstream manufacturers to jointly develop and improve.
The company expects net profit attributable to shareholders of listed companies in 2021 to be 181.5 million yuan to 218.5 million yuan, compared with a loss of 246.9053 million yuan in the same period last year, and a net profit after deducting non-recurring gains and losses of 76.5 million yuan – 113.5 million yuan, compared with a loss of 298.3387 million yuan in the same period last year. The main influencing factors of the company's performance changes in January-December 2021 are: (1) Benefiting from the market recovery in the LED industry, the price of some chips has risen, and the company's profitability has improved. (2) The company's Nanchang blue-green chip (phase I) project production capacity was fully released, the production capacity and product structure of the three production bases were continuously optimized, the operational efficiency was continuously improved, and the booming market demand drove the company's production and marketing rate and capacity utilization rate to show an upward trend, resulting in a substantial increase in the company's operating income and product gross profit rate year-on-year, resulting in a year-on-year increase in net profit. (3) Benefiting from the improvement of the market situation, the amount of the company's asset impairment loss and credit impairment loss decreased year-on-year, resulting in a year-on-year increase in net profit.
On November 18, 2020, the company announced that it intends to raise no more than 1.5 billion yuan of additional funds, which will be invested in Mini/Micro, high-efficiency LED chip research and development and manufacturing projects and supplementary working capital profile projects, and the planned raised funds will be invested in 1.15 billion yuan and 350 million yuan, respectively. Among them, the "Mini/Micro, high-efficiency LED chip research and development and manufacturing project" will be implemented by Jiangxi Qianzhao Optoelectronics Co., Ltd., and the implementation site will be Changyan Industrial Park, a newly built district in Nanchang City, Jiangxi Province. After the completion of the project, a total of 6.36 million pieces of Mini LED BLU, Mini LEDGB, Micro LED chips, and high-efficiency LED chip production capacity will be added.
On March 11, 2022, the company disclosed the issuance of A shares to specific targets, and determined that the issue price was 8 yuan per share, the number of shares issued was 187.5 million shares, and the total amount of funds raised was 1.5 billion yuan, mainly for investing in the construction of "Mini/Micro, high-efficiency LED chip research and development and manufacturing projects" in Nanchang. The company is strongly optimistic about the future application of Mini LED and Micro LED, has completed the technical reserves of Mini LED and has product sales, 21 years of shipments are small because of the traditional field order full of company production capacity, there is no new capacity layout in Mini LED, with the landing of the fixed increase, 60% of the investment project capacity invested in Mini LED, the average annual revenue of this investment project after production is about 1.021 billion yuan, the average annual gross profit margin can reach 29.75% Together with other supporting projects, the company will add more than 50% of its chip production capacity, further enhance the company's position as the industry leader, and let the company win the market opportunity in the process of Mini/Micro LED industrialization.
The company is a leading manufacturer of red and yellow chips in China, actively expanding VCSEL lasers, Mini-LED, Micro-LED, ultraviolet UVLED, infrared detectors, gallium arsenide substrates and other fields, and is expected to enjoy the dividends brought by the continuous prosperity of the LED industry. It is estimated that the company's net profit attributable to the parent from 2021 to 2023 will be 2.01/2.47/275 million, eps will be 0.28/0.35/0.39 yuan, and the corresponding PE will be about 28X, 22X and 20X respectively. (Source: Future Think Tank)
4.6 Longli Technology
Founded in 2007, the company is a professional LED/CCFL backlight research and development, production and sales of high-tech enterprises, focusing on the backlight display module research and development and production, has gradually developed into a strong domestic R & D strength, production scale of one of the important backlight display module enterprises. In 2020, the company's main business is the backlight display module industry, accounting for 99.59% of revenue. As of December 31, 2021, the company has applied for a total of 145 patents in Mini LED-related fields and won 10 Mini LED-related innovative product awards. The company partnered with TCL to develop a 13.3-inch Mini LED tablet display and the world's first 34-inch Mini LED curved gaming display, and partnered with Konka to release a 31.5-inch Mini LED display.
The company expects a net loss attributable to shareholders of listed companies of 0.75 billion yuan to 110 million yuan in 2021, compared with a profit of 43.4561 million yuan in the same period last year; a net loss after deducting non-recurring gains and losses of 0.9 billion yuan to 127 million yuan, compared with a profit of 12.4585 million yuan in the same period last year. The main reason for the company's loss is the intensification of industry competition and the decline in product prices, although the shipment volume in 2021 increased significantly compared with the same period last year, but the impact of the price decline was greater than the impact of the increase in shipments. At the same time as the price of the product fell, the cost of purchasing product materials did not fall in the same proportion, and the profit margin was compressed, resulting in a loss in 2021. In addition, due to the impact of equity incentives and convertible corporate bonds, related expenses were accrued about 17 million yuan.
On March 15, the company issued a fixed increase prospectus, announcing that it intends to raise about 1 billion yuan from no more than 35 issuers to invest in the construction of a large-size Mini LED display module intelligent manufacturing base project and supplement working capital.
Medium and large size Mini LED display module intelligent manufacturing base project will build a domestic first-class backlight module industrial base, the main product is medium and large size Mini LED display module, in order to better meet the future market demand for Mini LED backlight module products, the project design annual production capacity of 2.6208 million pieces. In the future, with the release of mini LED display module intelligent fundraising project capacity, it is conducive to further maintaining and expanding the company's first-mover advantage in Mini LED technology, accelerating the increase in capacity, which is conducive to the adjustment of the company's business structure and the broadening of application fields, and cultivating new business growth points.
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank].