The leading position of LCD panels is prominent, and sustainable profitability can be expected: At present, the global LCD panel industry has become increasingly competitive, and the transfer of industrial centers to China is becoming more and more obvious. With the new annual production capacity being limited, the large-scale trend of downstream demand can be achieved. Effectively consuming new capacity, the overall supply and demand is expected to maintain a stable level, accompanied by normal seasonal fluctuations. After years of continuous deepening and accumulation, the company's TFT-LCD products have become the world's absolute leader. The production line layout is perfect and the product structure is reasonable. Fuzhou 8.5 Generation Line In addition, the Hefei 10.5-generation line production market is in short supply. Along with the trend of large-size and high-definition TVs, the profit outlook is optimistic. At the same time, depreciation of the Hefei 6th Generation Line and Beijing 8.5th Generation Line will be completed in the near future. It is expected that Profit generates a considerable positive contribution.
Flexible OLEDs are expected to break through the monopoly of South Korean manufacturers: Flexible OLEDs are the direction of innovation for smartphones. According to third-party agencies, this year's global smart phone OLED panel market will reach US$33.7 billion, and will further double by 2022. The company has spared no effort to establish its layout. Flexible OLED technology and production capacity, Chengdu Flexible OLED production line has been ramping up smoothly since volume production at the end of last year. Meanwhile, two flexible OLED production lines in Mianyang and Chongqing will be successively produced in 19 and 20 years. The three lines will be planned for 144k months. The production capacity will leap to the second place in the world, and it is expected to break the dominance monopoly of South Korean manufacturers, and rely on the significant profitability to make the company's overall performance benefit from the OLED development trend for a long time.
Forward-looking layout leads the long-term development direction: The company proactively proposes '8425 Strategy', which means 'to promote 8K, popularize 4K, replace 2K, use 5G', and build an ultra-high-definition industry ecosystem with upstream and downstream manufacturers, and continue to lead the display industry. The development direction. At the same time, we will vigorously expand the smart system and health service business groups to establish a new strategy for the DSH business. The company is moving toward a 'software-hard integration, application integration, and service transformation' direction, with the help of display, sensing and other core advantages. Cross-border innovation in technology, smart intelligence system and health services, the future with the Internet of Things, 5G, artificial intelligence and other emerging technologies mature, the company's smart services and health services are expected to usher in rapid development opportunities.
Financial forecasts and investment advice
We predict that the company's EPS in 17-19 will be 0.22, 0.30 and 0.39 yuan respectively. According to the comparable company, the company will give the company 25-fold PE valuation for 18 years, corresponding to a target price of 7.50 yuan, and give a Buy rating for the first time.
risk warning
Risk of price fluctuations in LCD panels; Flexible OLED new product expansion does not meet expectations.