Zhaochi (002429): Multimedia + LED two-wheel drive is expected to return to steady growth
Investment logic: The company’s “multimedia + LED” dual-wheel drive model is gradually taking shape and is optimistic about the development of the domestic market.
The policy is favorable to the smart TV market. The use and replacement tide overlap, and the ultra-dimensional ecology helps the growth of LCD TV business.
The demand for automotive lighting has grown, Mini LED has ushered in industrialization, and the effect of the LED’s entire industrial chain layout will now be transformed into more production lines and gradually put into production, which will greatly help the company’s revenue growth.
“Multimedia + LED” two-wheel drive.
In 2018, the company’s multimedia audiovisual business achieved revenue 111.
20,000 yuan, an increase of 27 in ten years.
9%; LED business achieved revenue 17.
5 ‰, an increase of 14% in ten years, the proportion of total revenue continued to rise, reaching 13.
As the LED upstream epitaxial wafer and chip projects are put into production, the layout of the entire LED industrial chain is completed, and the “multimedia + LED” two-wheel drive model is gradually presented.
The number of cable TV users declined, and the development of smart TV ushered in new opportunities.
In 2019, OTT TV users will surpass cable TV users for the first time and become the new mainstream.
The development policy of the ultra-high-definition video industry is favorable for future development. The completion of short-term content will increase the capacity of the smart TV market. The “hardware + platform + content” ultra-dimensional ecological advantage is obvious. The company’s LCD TV business will usher in new opportunities.
The layout effect of LED’s entire industrial chain will be present, and new areas may have new growth.
The company’s LED epitaxial wafer and chip projects have been packaged. The first phase of the expansion project has completed the construction of the main body of the plant. It is expected that the production volume will be put into operation by the middle of the year.
The growth of the general lighting market is weak. Automotive lighting and Mini LED backlighting will become the next entry point. The company’s layout in these areas may bring new growth.
Earnings forecasts and investment advice.
It is expected that EPS for 2019-2021 will be 0.
12 yuan, 0.
14 yuan, 0.
15 yuan, the net profit attributable to the mother in the next three years will remain at 15.
3% composite strength.
With reference to comparable companies’ unanimous expectations, considering the company’s LED packaging production, rapid expansion of revenue scale, the first coverage, given an “overweight” rating.
Risk warning: raw material price or potential fluctuation risk; exchange rate change risk; terminal demand is less than expected risk.