TCL Group (000100): Focus on core industries, small-sized capacity growth exceeds expectations
Event: The company released its semi-annual report. In 2019H1, TCL Group plans to test the caliber to achieve operating income of 26.1 billion yuan, an increase of 23% year-on-year.
9%, achieving a net profit of 26.
400 million, year on year.
Stripping the terminal and supporting businesses, focusing on the semiconductor display industry, and significantly improving operating efficiency.
After the reconstruction is completed, the company will focus on the company ‘s core semiconductor display industry by stripping its terminal business, streamlining its business structure, and effectively controlling costs and increasing efficiency.
The establishment of the company will extend other electronic information cores and basic industries through industrial finance and venture capital business, and lay out the technical applications related to the main industry to deepen the industrial depth.
The reorganization will help the company to diversify and truly obtain the core profit momentum of sustainable development.
Panel prices are expected to rebound near the bottom. Emerging applications and country shifts in semiconductor display are trying to promote industry concentration.
TCL Huaxing (Huaxing Optoelectronics) 2019H1 expanded area of 9.61 million square meters, 9 years.
8%, realized revenue of 162.
80,000 yuan, an increase of 33 in ten years.
5%; net profit 10.
200 million yuan, a year-on-year increase of 7.
8%, mainly due to the continuous decline in panel prices.
However, we believe that the current panel price is near the bottom, and the inventory cycle in the third quarter pushed the price to rebound in the short-term.
In the medium to long term, emerging applications such as large-size TVs and commercial displays are emerging. At the same time, due to the domestic substitution of raw material procurement and the trend of concentrated panel production to the mainland, the overall oversupply has eased and prices have risen.
The production capacity of small-size production lines has exceeded expectations, and the advent of small-screen applications is expected to improve performance elasticity.
Rapid release of production capacity: As the production lines are successively put into operation, it is expected that the area of large-scale production capacity will reach CAGR17% and that of small-size is expected to reach CAGR26% in the next five years.
The t1 and t2 production lines maintained full production and sales, and the t6 production capacity increased rapidly, covering an area of 894 in 2019H1.
170,000 square meters,
9%, the budget volume is 19.45 million, and the sales income is 91.
90,000 yuan, YYY-15.
The small-sized panel has been rapidly ramped up to achieve an unexpected growth: the design capacity of t3 has been increased from 45K / month to 50K / month, and it is the world’s largest LTPS plant with single unit capacity.
80,000 square meters, an annual increase of 4.
58 times, realized sales income of 70.
9 trillion, more than four times a year.
t4 flexible AMOLED production capacity, yield quickly climbed, Q4 is expected to achieve mass production.
The technological advantages are reflected in continuous research and development to seize future high ground.
TCL Huaxing’s LTPS-LCD product has the second largest market share in the world, and the yield has climbed to the t4 production line, and competition has also increased rapidly.
At the same time, the advantages of HVA in the high-end market have been used, and its market share has ranked first in the country for five consecutive years. It has also entered the sequence of high-end product suppliers such as Samsung and Sony.
As the company continues to deploy 4K / 8K products, it will accelerate Mini-Led in TFT applications and gradually increase the competitiveness of high-end products.
In the field of small and medium-sized screens, the company’s COF narrow bezels and under-screen fingerprints have advanced in many fields. Kai Tie accounts for more than 80% of the top six global brand mobile phone manufacturers.
At the same time, continue to develop products such as flexible cameras under the screen, folding screens, etc., and actively lay out new types of new display technologies and materials such as flexible printing display technology and Micro Led, accumulating first-mover advantages in the process of updating alternative technologies.
The chairman repurchases a large amount and is optimistic about the long-term development of the company.
In the first half of the year, the company began to implement a 1.5-2 billion share repurchase program, and has now completed 15.
600 million shares were repurchased, and the remaining repurchases were subsequently completed based on market conditions.
Since December 20杭州夜网论坛18, the chairman has increased its holdings by nearly 1.
With 700 million shares, we are optimistic about the long-term development of the company.
Investment suggestion: We expect the company’s total pro forma revenue from 2019-2021 to be: 519.
200 million, 575.
900 million, 671.
9 billion, net profit attributable to shareholders of the parent company were: 40.
0 billion, 43.
500 million and 47.
Focusing on the company’s core business focus, Huaxing Optoelectronics became the main core asset of the listed platform after the reorganization.
Benefiting from the increase in domestic concentration of the panel industry and the future price rebound trend, the company’s own domestic raw material substitution for purchasing raw materials and technological innovation have reduced costs, and Huaxing Optoelectronics’ performance has promoted rapid growth.
Based on this, 1 is assigned.
5 times PB, calculated according to the estimated net assets of Huaxing Optoelectronics after the reorganization of 385 trillion, with a target total market value of 577.
500 million with a target price of 4.
28 yuan, maintain “Buy” rating.
Risks suggest that the Sino-US trade dispute is becoming more global, the global economy is weak, TV sales continue to slump, and panel positions are shifting; panel price instability and the unpredictability of panel price recovery periods; technology R & D businesses are less than expected, systemic risks.