(Report Producer/Analyst: Kaiyuan Securities Ren Lang Zhu Guangshuo)
1. Domestic machine vision leading enterprise, raising investment and strengthening core competitiveness
1.1. Establish the main channel for the development of machine vision, and broaden the growth path of horizontal layout
The company has long been engaged in machine vision and optical communication business, and is a leading enterprise in machine vision in China.
Since its establishment, the company has been based on optical technology innovation, long-term engaged in machine vision and optical communication business, serving a number of industries, the current strategic focus on machine vision business.
The company is a professional supplier of configurable vision systems, intelligent vision equipment and core vision devices, and is one of the earliest enterprises in the mainland to enter the field of machine vision.
In addition, the company is engaged in the agency business of optical fiber devices and instruments and vision devices of well-known overseas brands. The company has gone through three major stages of development and has now established machine vision as the main channel for development.
The company's development process can be divided into three stages.
The first stage (2002-2006): The company gradually deepened into more than a dozen sub-industry applications by acting as an agent for foreign excellent core vision devices and optical communication device products, providing value-added services and serving industry-university-research customers.
The second stage (2006 to 2015): The company continued to increase investment in research and development, vigorously expanded the visual application of multiple industries, and gradually entered the consumer electronics, new display, printing and packaging and intelligent transportation industries; The company's optical communication agency business has gradually developed from optical devices to optical devices and instrumentation products.
The third stage (2016 to date): the company clarified the machine vision business as the main channel of the company's strategic development, and further increased its investment in the research and development of machine vision products; In the field of optical communications, the company's optical devices and instruments agency business is based on many years of business foundation, while continuing to develop rapidly, but also for the company's machine vision strategic business development to provide stable profits and cash flow support.
The company's shareholding structure is stable, and the actual controller is the founder Dr. Yao Yi.
As of July 6, 2022, the top three shareholders of the Company are Mr. Yao Yi, Shenzhen Dachen Chuangtong Equity Investment Enterprise and Ms. Yang Yi. The controlling shareholder of the company is Yao Yi, and the actual controller is Yao Yi and his spouse Yang Yi. Yao Yi directly holds 44.50% of the company's shares, and Yang Yi directly holds 5.23% of the company's shares. Up to now, the two hold a total of 49.73% of the company's shares, with a stable shareholding structure and small operational risks.
Multi-dimensional layout of wholly-owned subsidiaries, horizontal layout to expand the growth path.
As of June 15, 2022, the Company has seven wholly owned subsidiaries. Among them, Lingyun Vision is mainly engaged in the research and development, production and sales of intelligent detection equipment; Lingyun Photonics is mainly engaged in the research and development, production and sales of configurable vision systems; Lingyun Optical International mainly purchases or sells overseas products of vision devices, optical fiber devices and instruments for the company; Suzhou Lingyunguang is mainly engaged in the research and development and production of machine vision, and is the main body of the implementation of the Taihu Lake Industrial Base of Industrial Artificial Intelligence of the fundraising project; Lingyun Tianbo is mainly engaged in optical communication access networks, while expanding machine vision business; Lingyun Optical Communication is mainly engaged in the agent sales business of optical fiber devices and instruments; Lingyun Video is mainly engaged in the research and development, production and sales of 3D configurable vision systems.
1.2. Focus on the independent business of machine vision, and the industrial chain continues to deepen and develop
The company has gradually formed a business layout based on independent research and development business, supplemented by agency business, mainly machine vision business and optical communication business, and the machine vision industry chain continues to deepen and develop in a longitudinal manner.
In the field of machine vision, the independent products provided by the company mainly include configurable vision systems and intelligent vision equipment; In the field of optical communication, the company provides independent optical access network products and serves domestic and foreign radio and television network companies. In addition, the company is engaged in the agency business of optical fiber devices and instruments and vision devices of well-known overseas brands.
The company is laid out from the two-dimensional four-quadrant, and the machine vision business and independent research and development business are the main sources of revenue.
From 2019 to 2021, the company's main business products include two major parts, autonomy and agency, according to their sources, involving two major business segments of machine vision products and optical communication products. Among them, in 2019, 2020 and 2021, the proportion of independent business was 55.11%, 53.40% and 60.52% respectively.
In 2020, the proportion of independent business revenue decreased, mainly due to the company's strategic contraction of optical access network business, and the proportion of optical access network product revenue decreased from 10.98% to 5.26%.
In 2021, with the rapid growth of machine vision R&D investment and business expansion, the proportion of independent business revenue increased significantly.
From 2019 to 2021, the revenue generated by the company's machine vision field accounted for 56.96%, 60.03% and 62.03% respectively, and the proportion of revenue increased year by year.
The company's machine vision business covers the company's independent production of configurable visual systems and intelligent visual equipment and the company's agent of vision device products, the industrial chain to deepen the development.
Correspondingly, the proportion of revenue of optical communication business has declined year by year, mainly due to the lack of growth of radio and television users, the development of the industry has been greatly affected by the impact of mobile broadband and declined, and the company has adopted an active strategic contraction strategy for the business.
The fundraising project focuses on the main business of machine vision and further enhances the company's core competitiveness.
The company's investment projects include: industrial artificial intelligence Taihu Industrial Base, industrial artificial intelligence algorithm and software platform research and development projects and advanced optical and computational imaging research and development projects, science and technology and development reserve funds.
The total investment amount of the company's project is 2,109,273,800 yuan, and the investment amount of the proposed raised funds is 150,000.00 yuan.
The funds raised will focus on the company's main business, which is conducive to upgrading the company's existing products and technology upgrades, enhancing the company's core competitiveness and increasing market share.
1.3. The company's performance has grown steadily, and the cost control during the period is good
Operating income increased steadily, and net profit attributable to the mother continued to increase.
The company's operating income in 2018, 2019, 2020 and 2021 was 14.06, 14.31, 17.55 and 2.436 billion yuan respectively, an increase of 1.79%, 22.70% and 38.77% year-on-year, and a CAGR of 20.12%; Attributable net profit was 0.55, 0.37, 1.32 and 172 million yuan, respectively, down 32.74% year-on-year, an increase of 254.21% and an increase of 30.27%, and cagr was 45.86%.
The main reasons for the sustained and stable growth of the company's operating income are: the rapid development of the machine vision market, which promotes the continuous growth of the company's operating income; The company focuses on the field of machine vision, and the product system is constantly improved and upgraded; The company continues to invest in technology research and development to provide a solid foundation for the sustained growth of operating income; End customers are rich in resources, and well-known head enterprises have deep cooperative relations.
The company's profitability is relatively stable, and the expense ratio has declined year by year during the period.
Overall, the company's profitability is relatively stable, from 2019 to 2021, the gross profit margin of the company's main business is 34.29%, 34.57% and 33.38%, and the net profit margin level is 2.73%, 7.46% and 7.10%, respectively.
In 2021, the gross profit margin decreased slightly, mainly due to changes in the product structure, and the sales of some low gross profit margin products increased significantly, which reduced the gross profit margin of the main business as a whole.
From 2019 to 2021, the company's total period expenses were 4.85, 4.99 and 669 million yuan, accounting for 33.93%, 28.45% and 27.44% of the operating income, respectively, due to the impact of equity incentive expense sharing in 2018, the overall expense ratio of the period increased significantly.
The amount of the 2019-2021 allocation of management expenses was $440 million, $437 million and $0.40 billion, respectively.
In 2021, the expense ratio for the period decreased slightly, which was caused by the expansion of the scale of operating income, the relative maturity of the issuer's sales channels and management system, and the level of related expense growth was lower than the marginal scale effect brought about by the expansion of operating income.
Intelligent vision equipment and configurable vision systems have higher gross profit margins, and the gross profit level of autonomous business is relatively higher.
In terms of products, the company's products include configurable vision systems, intelligent vision equipment, optical access network equipment, vision devices and optical fiber devices, at the same time, between 2019 and 2021, the gross profit of the company's independent business main business is stable at 35%-40%, the gross profit margin of the agency business is stable in the range of 25%-30%, and the gross profit margin of the independent business is significantly higher.
The main source of the company's revenue is the sales of machine vision independent products, in 2019, 2020 and 2021, the gross profit of machine vision independent products was 248 million yuan, 329 million yuan and 501 million yuan, respectively, and the gross profit contribution rate to the independent business in each period was 78.36%, 88.08% and 89.62%, accounting for more than 75%, becoming the main source of gross profit for the company's independent business. The gross profit contribution rate of the company's agency products is mainly composed of optical fiber devices and instruments, and the gross profit contribution rate of such products is increasing year by year.
R&D expenses have increased significantly, and the number of R&D personnel is increasing.
The company adheres to independent research and development and independent innovation, and takes optical imaging and image processing algorithms as the core of technological development.
In recent years, the company has continued to maintain R&D investment and product innovation.
From 2018 to 2021, the company's R&D expenses were 1.32, 1.54, 1.76 and 281 million yuan, respectively, and the growth rates in 2019, 2020 and 2021 were 16.67%, 14.23% and 59.25%, respectively. At the end of each year from 2019 to 2021, the number of R&D personnel was 361, 434 and 590 respectively, accounting for 31.72%, 34.17% and 36.26% of the total number of company personnel, showing an upward trend year by year.
The company's continuous investment in research and development makes the company's products and services have a strong competitive advantage in technology, providing a solid foundation for continuous revenue growth.
2. Domestic machine vision is poised to develop, and the technology is hard + customer excellence to help the company's comprehensive development
2.1, machine vision has multi-dimensional advantages, downstream applications continue to expand
2.1.1, machine vision has multi-dimensional advantages, and China is in the early stage of rapid development
The essence of machine vision is to implant "eyes" and "brains" for machines.
Machine vision is mainly divided into imaging and image processing two parts, light source, lens, camera and image acquisition card equivalent to the eye, connecting cable equivalent to afferent nerve, image processing system equivalent to the brain, control mechanism and actuator equivalent to the hands and feet and other organs.
The workflow of a machine vision equipment includes visual imaging, automatic image acquisition, image preprocessing, image positioning and segmentation, image recognition and detection, visual servo and optimization control, etc. The measured object reaches the specified position and sends a trigger pulse to the image acquisition card, after the image acquisition card receives the pulse signal, the trigger signal is transmitted to the camera and the lighting system, the camera captures the image, the optical signal is converted into an orderly electrical signal, and then the signal is converted to analog-digital conversion and sent to the image processing software. Then according to the needs of the image processing analysis, recognition, and return judgment results or logic control values passed to the control mechanism for execution, to complete the specific function workflow.
Machine vision has significant advantages over human vision in many aspects, and the substitution value of many application scenarios is high.
Machine vision is an effective way to achieve precision control, intelligence and automation of equipment, can be called the machine eye of modern industry and intelligent manufacturing, compared to human vision in precision, speed, adaptability, objectivity, repeatability, reliability, efficiency, sensitivity range and information integration has a leading advantage in many aspects, especially in the detected items move fast, high precision requirements and high work repeatability in the scene, machine vision equipment compared to the human eye work efficiency improvement significantly, It can replace the human eye to achieve recognition, positioning, measurement, detection and other functions in a variety of scenarios.
At present, machine vision is mainly used in the field of industrial automation, non-contact detection of objects, measurement, improvement of processing accuracy, discovery of product defects and automatic analysis and decision-making. In the future, with the continuous development of deep learning, 3D vision technology, high-precision imaging technology and machine vision interconnection technology, the performance advantages of machine vision will be further increased, and the application scenarios will continue to expand.
Compared with developed countries, domestic machine vision is in the early stage of rapid development.
Globally, driven by imaging, applications, computing power, and algorithms, the machine vision industry is already in the early stages of development.
From 2000 to 2010, driven by the dual drive of application and computing power, the machine vision industry officially entered the early stage of development, and FPD flat panel inspection, PCB detection and automotive industry have put forward a large number of demands; Driven by algorithms in 2010-2020, the machine vision industry ushered in a period of accelerated development and was widely used in electronics, automotive, semiconductors and other fields.
Domestically, compared with developed countries, the industry started late.
In 2011, the 3C electronics manufacturing industry with Apple mobile phone manufacturing as the core created greater demand, directly promoting the rapid development of China's machine vision, and since 2019, the domestic machine vision industry has continued to maintain a growth rate of 20%-30%. According to CB Insight data, 2020 has become the world's third largest market after the United States and Japan.
The scale of the global machine vision market has resumed steady growth, and the scale of the domestic market has increased rapidly.
According to Markets and Markets, the global machine vision market will reach $10.7 billion by 2020, and from 2016 to 2020, the size will grow at a compound growth rate of 14.62%. In 2021, with the recovery of traditional industries and the vigorous development of the new energy industry, the demand for visual inspection products has increased, and the market size is expected to reach 14.7 billion US dollars in 2025.
According to the statistics of China Machine Vision Industry Alliance, the sales of China's machine vision industry increased from 10.180 billion yuan in 2018 to 14.420 billion yuan in 2020, with a compound growth rate of 19.02%.
Thanks to the macroeconomic recovery, increased investment in new infrastructure, accelerated data center construction, and the promotion of manufacturing automation, it is expected that from 2021 to 2023, the sales of China's machine vision industry will grow at a compound growth rate of 27.15%, and sales will reach 29.600 billion yuan by 2023.
Overall, the growth rate of the domestic machine vision market is much higher than that of the world, and the industry is expected to continue to maintain a high degree of prosperity under the resonance of supply and demand in the future.
2.1.2, the downstream application continues to expand, the local market space is broad
The machine vision industry includes upstream software and hardware manufacturers and midstream integrated manufacturing equipment manufacturers, and downstream applications are blooming.
The upstream of the machine vision industry chain is composed of machine vision components and algorithm software, the core components include light sources, industrial lenses, industrial cameras, image acquisition cards, algorithm software, etc. The domestic machine vision upstream market is mainly occupied by foreign veteran manufacturers; The midstream includes machine vision equipment manufacturers and system integrators, mainly responsible for the secondary development of software and the manufacture of equipment, due to the relatively low market concentration of downstream demand and fragmented midstream enterprises; The downstream of machine vision is a terminal application industry, covering electronics, semiconductors, automobile manufacturing, food packaging, pharmaceuticals and other fields, with many types of application scenarios.
The downstream field of machine vision is constantly expanding, and the demand for new energy and automotive industries is expected to continue to increase.
With the rapid development of technology, the downstream field of machine vision continues to expand, gradually penetrating into 3C electronics, automotive, semiconductors, batteries, packaging, food, medicine and other industries. Among them, the top three industries in China's machine vision applications are consumer electronics (52.90%), semiconductors (10.30%), and automobiles (8.80%).
Looking forward to the future, we believe that 3C, new energy and automobiles are still the most important downstream areas, and the driving forces of each industry are: rapid technological innovation in the 3C industry, fast product iteration, high demand for lightweight, coupled with the gradual increase in demand for machine vision in the domestic Android system, and continue to stimulate the upgrading of machine vision inspection technology to improve production capacity and quality; The rapid development of the new energy market represented by lithium batteries and photovoltaics in China has brought new incremental demand to the machine vision market; Under the development trend of intelligence and lightweight, coupled with the localization improvement brought about by the performance improvement of local products, the demand for machine vision in the domestic automotive industry is expected to continue to increase.
3C Electronics is the largest segment of machine vision, and the requirements of high-precision detection and the trend of terminal high-end continue to promote the demand for machine vision applications. Due to the industry attributes with high demand for 3C electronic automation and the product attributes with high precision requirements, it is determined that 3C electronics accounts for a relatively high proportion in the downstream field of machine vision, with a market share of 52.9% in 2020.
In the future, we believe that 3C electronics will continue to be the main application industry for machine vision, for two main reasons:
First, the requirements of the 3C electronic production line for production efficiency and processing accuracy are increasing, and the penetration rate of machine vision in 3C electronics is expected to continue to increase;
Second, consumer demand for high-end mobile phones has gradually increased, IDC data show that from 2018 to 2021, the proportion of global shipments of smart phones above $600 increased from 19.26% to 22%, while domestic Android manufacturers also focused on the layout of high-end models, and the high-end of smart phones stimulated the demand for machine vision to rise.
The photovoltaic and power battery industry has developed rapidly, opening up the upward space of the machine vision industry.
Photovoltaic, semiconductors and other new energy industries account for 10% of the downstream applications of machine vision, the future is expected to become the backbone of the machine vision downstream industry, the main reasons are two: First, benefit from the "double carbon policy" impact, the domestic photovoltaic new installed capacity increased on a large scale, according to the Ministry of Industry and Information Technology data, in 2021 the new domestic photovoltaic installed capacity of 53GW, an increase of nearly 10% year-on-year, the photovoltaic industry is expected to promote the application of machine vision in the photovoltaic industry; According to data from the China Association of Automobile Manufacturers, power battery shipments reached 186GWh in 2021, an increase of 132.5% year-on-year, and the car maintained the momentum of electrification.
At the same time, machine vision equipment is used in lithium battery cells, modules, pack stages, and the future lithium battery field is expected to become a performance growth point of machine vision.
Machine vision has a wide range of applications in the automotive field, and the trend of intelligence and lightweighting accelerates the penetration rate of machine vision.
At present, machine vision is mainly used in the automotive field in the two directions of intelligent manufacturing and intelligent driving. From the perspective of intelligent manufacturing, at least hundreds of links in the field of automobile production have the need to apply machine vision for inspection, positioning and measurement, including distinguishing shaft lengths, detecting curved terminals in ignition coils, detecting the position of weld beads, tracking during assembly, etc., and the application needs are very extensive; From the perspective of the direction of automatic driving, the primary premise for completing automatic driving is on-board sensors, the core component of which is the on-board camera, including monocular vision, binocular vision, etc.
According to the statistics of the Ministry of Industry and Information Technology, in 2021, the sales of new energy vehicles in mainland China will reach 3.521 million units, an increase of 1.6 times year-on-year, ranking first in the world for 7 consecutive years, and the demand for intelligent manufacturing will grow accordingly. In the future, under the trend of automotive intelligence and lightweighting, the value of bicycle electronic parts will continue to increase, and the demand for machine vision in the corresponding automotive production line will continue to increase.
2.2, Lingyunguang: independently build a technology platform, high-quality customers to drive the company forward
The main business of machine vision products, intelligent vision equipment and configurable vision systems contribute the main income.
From 2018 to 2021, the company and its vision product revenue accounted for more than half, and there is a trend of increasing year by year, in 2021, the revenue of machine vision products was 1.511 billion yuan, accounting for 62.02%, an increase of 1.99 percentage points over 2020.
The company's machine vision business is divided into intelligent visual equipment, configurable visual systems, visual devices, etc., of which intelligent visual equipment and configurable visual systems are autonomous services, and visual devices are agent services.
From 2018 to 2021, the proportion of independent business in the company's machine vision business is relatively high and increases year by year, from 73.38% to 86.58%, and the proportion of agency business decreases year by year, from 26.62% to 13.42%.
The main products cover full coverage, downstream multi-field personalized application.
Machine vision to visual devices, configurable vision systems and intelligent visual equipment and other forms of service to various industries, the company's products cover the three forms of machine vision, and for consumer electronics, new energy, automobile manufacturing, printing and packaging and other industries to form personalized products.
Configurable vision systems implant "eyes" and "brains" into machines to complete image acquisition and information preprocessing functions, which the company has applied to consumer electronics, intelligent transportation, stereo vision, scientific images, and other manufacturing industries.
Intelligent visual equipment on the basis of the configurable visual system to add the structure of the body and automatic control components, implanted the machine controlled by the brain "muscles" and "limbs", and finally formed "hand", "eye", "brain" synergy of intelligent equipment, which has been applied to new displays, consumer electronics, printing and packaging, new energy and other fields.
In the vision device segment, the company has established long-term cooperation with Teledyne Dalsa, FLIR Integrated Imaging Solutions and other internationally renowned manufacturers to provide customers with diversified and differentiated products and services.
The company has two major advantages in the field of machine vision: fully master the underlying technology of "optical electromechanical computing soft", and has a self-built machine vision core technology platform; The company has accumulated high-quality customer resources and has a high market position in various downstream fields.
2.2.1, "optical mechanical and electrical soft" capabilities superimposed on the autonomous platform, technical advantages to build a deep moat
Three-step layout of machine vision technology, actively applied to various industries. The company gradually completed the research and development of machine vision technology in three stages and applied it to all walks of life:
The first stage (2002-2006) to build the whole machine independent research and development capabilities, the company through the printing and detection business initially built a hundred people with optical, mechanical, electrical, computing, soft and other underlying technology independent research and development capabilities, and began to start the development of Vision WARE software algorithm;
The second stage (2006-2015) was upgraded to a platform-based capability of products and technologies, and the company's business scope was gradually expanded from the printing industry to printing and packaging, display screens, consumer electronics and other industries, further improving the platform-based capabilities of products and technologies;
The third stage (2016-present) to build automation technology capabilities, the company further built the assembly line and multi-axis manipulator and other automation technology capabilities, support the company to enter the field of large-scale intelligent visual equipment, automation, large-scale replacement of manual operations.
Fully grasp the underlying technology of "optical-mechanical-electrical computing soft", and independently build a core technology platform for machine vision.
The company's core technical capabilities are composed of four levels: application platform, product platform, technology platform and technology module.
On the technology platform, the company has been deeply engaged in the machine vision industry for nearly 20 years, fully mastered the underlying technologies such as "light, machine, electricity, computing, and soft", and then formed five major platform technologies such as precision imaging technology platform, configured software platform, image processing and analysis algorithm platform, precision machinery and automation control platform, artificial intelligence big data processing and analysis platform, and launched configurable visual systems and intelligent visual equipment and other products, further expanding to the overall solution of smart factories, for new display, consumer electronics, Companies in the fields of printing testing, new energy and other fields provide quality products and services.
Has a powerful machine vision algorithm platform to meet the high standards of customers.
Machine vision algorithm is a key step in obtaining image information, and mainstream machine vision software is monopolized by most foreign enterprises, including openCV, Halcon, VisionPro, MIL and other industry leaders to develop software.
Most of the domestic machine vision processing software in the foreign algorithm library on the secondary development, very few enterprises have an independent underlying algorithm library, the company began to independently develop the machine vision algorithm platform VisionWARE1.0 in 2005, has been iterated to version 5.0, the formation of a completely independent intellectual property rights of the machine vision image processing core algorithm platform, to achieve Cognex and other companies import substitution.
Based on this algorithm platform, the company has developed a series of software such as Vision Laser, Vision ALN, Vision Assembly, Vision3D, Vision Deep Learning and so on. The software is developed in-house with good third-party algorithm compatibility, and can be quickly integrated with open source algorithms (such as OpenCV libraries) and/or commercial algorithms as a complement to non-core functionality when necessary to improve efficiency.
At present, the software has widely served Apple's industrial chain, which can meet the technical needs of customers in high precision, high efficiency and high quality in manufacturing.
Digital human technology has developed rapidly and has been successfully applied to many scenarios.
In 2012, Yang Yi, one of the core founders of Lingyunguang, participated in the project of "stereoscopic video reconstruction and display technology and device" won the first prize of the National Technology Invention Award, based on this technology, the company developed and formed a virtual digital person and successfully applied it to many scenarios.
In the Winter Olympic Games, CCTV Spring Festival Gala, special programs of the two sessions, service trade fairs, farmers' harvest meetings, China Science Fiction Convention and other virtual digital people appeared many times, enriching the digital human image generation and production technology, and creating a beautiful virtual world for customers.
With the continuous enrichment of digital people's application scenarios, digital people have also been given more industry attributes, and will shine in many fields such as finance, film and television, live broadcasting, and games in the future.
The software and hardware patents have a deep accumulation and lead the formulation of a number of standards.
As of December 31, 2021, the company has 418 domestic patents, including 234 invention patents, 152 utility models, 32 designs, and 427 accepted patents. At the same time, the company has obtained 208 software copyright certificates. Compared to companies in the machine vision industry, the number of patents is among the highest.
In addition, the company has led or participated in the formulation of 16 national, industry and group standards, including 4 national standards that have been implemented (2 of which are led and 2 are involved in the formulation), 7 industry and group standards (of which 1 is led and 6 are involved in the formulation), and 5 are in preparation.
2.2.2, high-quality customers to drive the development of the company, the market position continues to be strong
The downstream applications of vision products are widespread, and consumer electronics, printing and packaging, and new displays are the main application areas.
In the revenue of intelligent visual equipment in 2021, the revenue of printing and packaging, consumer electronics, new displays, and new energy accounts for 30.60%, 30.37%, 29.21%, and 9.81%, respectively, and the CAGR in 2018-2021 is 18.67%, 166.34%, 4.17%, and 63.07%, respectively, of which consumer electronics has the fastest growth rate.
In the revenue of configurable visual systems in 2021, consumer electronics, scientific images, stereo vision, intelligent transportation, and other manufacturing revenues accounted for 30.82%, 19.27%, 14.96%, 9.38%, and 25.57% respectively, and consumer electronics and other manufacturing industries accounted for a relatively high proportion, of which other manufacturing industries had the fastest growth rate.
Accumulate high-quality customer resources in multiple fields to drive the company forward.
In the field of consumer electronics, the company has long served the industrial chain of Apple, Huawei and Xiaomi, and has established long-term and stable cooperative relations with leading electronic manufacturers such as Hon Hai Precision, AAC Technology, goertek and so on;
In the field of new display, the company's products are widely used in the panel production line of leading customers in the industry such as BOE, Huaxing Optoelectronics, Tianma, Visionox, Wuxi Sharp, Innolux and other industry leaders;
In the field of new energy, the company's products widely serve The leading industries such as Follett Group, CATL Times, Xinyi Group and so on; In the field of printing and packaging, the company is the mainstream supplier of domestic labels, flexible packaging, carton packaging and other markets, and its products have been sold to more than 15 overseas countries and regions;
In the field of intelligent transportation, the company's products are widely used in the online operation and maintenance monitoring business of subways, emulses, locomotives, and catenary networks; The stereoscopic vision series products developed by the company and the "digital people" products have begun to be widely used in the field of culture and entertainment.
In the future, in the process of deepening cooperation with high-quality customers in multiple industries, customers will propose new scenario identification, positioning, measurement or detection needs that will drive the company to continue to develop, and eventually form a virtuous circle of interaction between the company and downstream customers.
Bound to apple & Foxconn two major consumer electronics leaders, the future growth space is considerable.
Since 2016, the company has become Apple's preferred short list supplier in the field of machine vision, and among the company's top five customers in 2021, Hon Hai Precision, AAC Technology, and BOE are all partners in the Apple industry chain.
With the increase in the degree of iteration of Apple mobile phones and other products, while Apple's demand for machine vision is being placed from the assembly plant to the front of the module factory, the penetration rate of machine vision in consumer electronics is expected to continue to increase, and the company as a domestic machine vision leader is expected to achieve greater growth in the 3C field. At the same time, the company has cooperated deeply with Foxconn to become its "best strategic supplier", and the company's revenue is expected to continue to grow in the future as Foxconn's demand for factory digitalization and intelligence increases.
Product sales ranked first in the list, and the domestic market position was leading.
The company is one of the major machine vision suppliers in the Chinese mainland, according to the statistics of China Machine Vision Industry Alliance, in 2020, in the participating enterprises (excluding Keyens, Cognex, Precision Electronics, Huaxing Yuanchuang, Young Woo DSP and ISRAVISION), the company ranked first in the sales of China's machine vision industry and has a high market position.
Consumer electronics, printing and packaging are in the lead, and emerging fields are growing rapidly.
In the field of consumer electronics, the company broke the monopoly of overseas manufacturers such as Cognex and Keynes, and became the preferred supplier in the field of machine vision certified by Apple.
According to CINNO Research, in terms of operating income, the company's market share in the field of configurable vision systems for consumer electronics in China in 2020 was 22.4%, ranking third in the industry, second only to Cognex and Keyens.
In the field of new display, the company's products can serve the production line process of LCD and OLED display, which is widely used in the production line of BOE, Huaxing Optoelectronics, Tianma, Visionox and other industry-leading customers, and meets customer requirements in the core indicators such as detection accuracy, defective product leakage rate and detection efficiency.
In the field of printing and packaging, according to the statistics of CINNO Research, in terms of output value, the company's market share in the field of machine vision intelligent equipment in China's printing industry in 2020 is 21.1%, ranking first in the industry.
In addition, the company has increased its investment in emerging fields such as new energy, stereo vision, and scientific images, and the CAGR in 2018-2021 will reach 63.07%, 42.40%, and 34.93%, respectively.
3. Three major boosts to promote the long-term improvement of optical communications, and related devices usher in demand expansion
3.1, optical communication demand for long-term good, the future growth space is broad
The state vigorously supports the development of the optical communication industry and accelerates the process of localization and substitution.
In recent years, the mainland optical communication industry has developed rapidly, and some products occupy an important position in the world, but the domestic core optical communication chips and devices rely heavily on imports, and the localization rate of high-end optical communication chips and devices is less than 10%.
Therefore, the mainland has issued a number of policies to vigorously promote the development of the optical communication chip industry.
For example, in January 2021, the Ministry of Industry and Information Technology issued the "Action Plan for the Development of the Basic Electronic Components Industry (2021-2023)", which proposes to focus on the development of high-speed optical communication chips, high-speed high-precision optical detectors, high-speed direct modulation and external modulation lasers, high-speed modulator chips, high-power lasers, digital signal processor chips for optical transmission, and high-speed drivers.
The National Development and Reform Commission's "14th Five-Year Plan" development plan and other guiding documents also support the development of the mainland optoelectronics industry and technology from the national strategic height as an important task, and strive to enhance the key devices and chip independent technologies of high-speed optical communications, and accelerate the process of localization and substitution.
With the construction of 5G networks, the scale of the optical communication market has once again ushered in a growth point.
Since the proposal of "Broadband China" in 2013 and the launch of the 4G construction cycle, China Optical Communications has shown rapid growth for many consecutive years.
According to the statistics of the China Commercial Industry Research Institute, the scale of the mainland optical communication market will gradually grow from 2016 to 2021, and it will exceed 120 billion yuan in 2020. However, as FTTX and 4G laying are nearing completion, 5G has just begun to be commercialized, and China's optical communication market, especially the optical fiber and cable market, is facing a green and yellow in 2019.
In the context of the large-scale deployment of 5G and Gigabit optical networks, optical fiber cables have ushered in rising demand and price bottoming out, and the construction of 5G networks, which has gradually entered a climax, will become a new growth point for the scale of the optical communication market.
With the technological progress and cost reduction of optical chips and optical devices, the optical communication industry will be able to better cope with the greater pressure brought about by the future massive data and high-speed computing requirements, and the optical communication industry is expected to maintain continuous growth.
However, compared with FTTX, the overall demand for optical communications in 5G is long-term and stable, and it is difficult to create a high compound growth rate of up to 15% in the past.
The trend of global optical communication industry value shifting to China is obvious, driving the domestic optical communication market demand.
Optical communication device industry global competition pattern has been formed, with the domestic optical communication device manufacturers R & D capabilities, production technology improvement, coupled with the cost advantages of products, domestic enterprises to increase the intensity of exports, foreign communication system equipment manufacturers have also increased the procurement of domestic optical communication device products.
At the same time, in order to reduce costs, foreign communication system equipment manufacturers have also shifted their production and research and development bases to Chinese mainland in recent years, which has also driven the demand for Chinese mainland optical communication devices market.
Ovum data shows that Everbright Technology, ZJI Innolux and Hisense Broadband have entered the top ten in the world. Due to the advantages of China's supply chain and manufacturing costs, the value of the optical communication industry has shifted significantly to China.
According to Ovum data, Lumentum/Il-VI, Finisar, and Optincey Technology accounted for 19.0%, 10.8% and 7.7% of the total industry, respectively.
3.2, Lingyun Optical: optical fiber devices + optical access network into the optical communication market, agent + autonomous dual line at the same time
There are many segments of optical communication, and the demand for various segments is expected to continue to increase in the future.
Optical communication is a general term for the communication technology that uses optical fiber as the main transmission medium to achieve user information transmission, including optical fiber cables, optical devices/optical modules, optical main equipment and other optical communication products required for the construction of operators' telecommunications networks and enterprise series communications, as well as network services such as planning, construction and optimization of optical networks.
According to CCID Consultants, the total market size of each segment will exceed 170 billion yuan in 2025.
The company's optical communication business is mainly for optical fiber devices and instrument agents and optical access network products.
The company's optical fiber devices and instruments are mainly agents of international well-known brands, and optical access network products are mainly for customers in the radio and television industry at home and abroad.
From 2019 to 2021, the total revenue of the company's optical communication business was 5.9, 6.8 and 880 million yuan, respectively, maintaining steady growth, of which the revenue of optical fiber devices and instruments was 4.4, 59 and 760 million yuan, respectively, rising year by year, while the revenue of optical access network was 1.6, 0.9 and 120 million yuan, accounting for 10.98%, 5.26% and 4.98% of the main business income, respectively, which declined, mainly in the case of the decline in the business development trend of the domestic radio and television industry. The company has gradually carried out a strategic contraction of the optical access network business.
From the perspective of the gross profit margin of the optical communication business, the gross profit margin of optical fiber devices and instruments has generally improved, while the gross profit margin of optical access network has decreased from 32.39% to 26.44%.
Optical fiber devices and instruments are one of the important subdivisions of the optical communication industry, and the company represents many well-known overseas manufacturers and brands.
Optical fiber devices mainly include ultra-high-speed optical modules, wavelength select optical switches, ultra-continuous spectral light sources, special optical fibers, special gratings and other products, the main manufacturers include II-VI, NKT Photonics, TeraXion, etc.; Optical fiber instruments include special optical fiber splicing machines, test instruments and other products, the main manufacturers include Fujikura, EXFO and so on.
At present, there is still a certain gap between domestic manufacturers' products and overseas manufacturers, and the high-end optical fiber devices and instruments in the Chinese market are mainly dominated by overseas manufacturers.
The company acts as an agent for the above-mentioned overseas famous brands, assists them to carry out value-added services such as market expansion, technical services, business services, localization maintenance and repair in China, and at the same time digs deep into the international leading foreign excellent product resources such as optical devices, equipment and test instruments, and helps the development of domestic production, education and research applications.
Optical access network is another important segment of the optical communication industry, and the company's independent business ranks high among domestic manufacturers.
The company is mainly for domestic and foreign radio and television industry customers, radio and television optical access network equipment including all kinds of optical amplifiers, optical receivers, optical transmitters, various types of MoCA access network equipment and optical access ONU/OLT (optical network unit / optical network terminal equipment), etc., the main manufacturers include Wanlong shares, Wuxi Leihua, Chengdu Kangte and Lutong Vision and other enterprises. According to CINNO Research, in 2020, the company ranked among the top five radio and television optical access network equipment companies in China, with a market share of 7%.
4. Profit forecast and valuation
4.1. Core assumptions
Machine Vision Business:
(1) Configurable vision system: Based on the revenue forecast of each subdivision product, we expect the revenue growth rate of configurable vision system from 2022 to 2024 to be 21.93%/22.34%/22.74%, respectively.
For the intelligent 3C configurable visual system, it is expected that in 2022, Apple's mobile phone products will usher in a year of demand, and the prosperity of the downstream consumer electronics industry will increase, and the average annual growth rate is expected to reach 30%; New energy industry companies are accelerating their expansion and gradually binding large customers, and their revenue is expected to increase rapidly; For 3D imaging, intelligent transportation, other industries and other fields, with the deepening of machine vision applications in various scenarios, the company's revenue is expected to maintain steady growth in various fields.
(2) Intelligent visual equipment: companies in the field of consumer electronics are deeply bound to Apple, and the great innovation of iPhone14 and the expansion of non-mobile phone products will drive the growth of machine vision demand; The related equipment products of companies in the new energy field are expected to benefit from the rapid growth rate of the industry and the rapid release of volume; 2018-2021 the company's printing and packaging visual equipment revenue CAGR of 19%, the company bound BOE, Lianchuang Electronics, TCL and other head manufacturers, with the printing and packaging scenes and display panel detection scene detection accuracy requirements improved, machine vision penetration rate is expected to continue to increase, it is expected that the company's revenue growth rate from the above areas will be further improved.
(3) Visual devices: In 2021, the company's visual device agency business revenue accounted for 13.42%, and it is expected to maintain steady growth between 2022 and 2024.
(4) Optical communication business: According to CCID Consultants, the optical communication market size will grow at a compound growth rate of 12.7% from 2020 to 2025, and the market size will exceed 170 billion yuan in 2025. The company's optical communication business is expected to benefit from the increase in industry demand, and we expect that the revenue of optical fiber devices and instruments and optical access network equipment is expected to achieve steady growth in 2022-2024.
4.2. Profit forecast and valuation
Based on the above assumptions, we expect the company's operating income from 2022 to 2024 to be 3.021/37.55/4.689 billion yuan, net profit attributable to the mother to be 2.21/2.80/385 million yuan, eps to be 0.48/0.61/0.83 yuan per share, and PE to 68.3/53.8/39.1 times for 2022-2024, respectively.
The valuation level is higher than that of other machine vision companies, considering that the company is deeply bound to leading customers in apple, BOE, Follett and other industries, and related products in the field of new energy are in the introduction period, and the related revenue is expected to increase rapidly.
5. Risk warning
The risk that product development cannot meet the needs of downstream applications and the risk of overseas procurement.
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