The production capacity of flexible AMOLEDs was further enhanced, and the industry's advantages were further consolidated. The company's AMOLED technology accumulated strong, Shanghai Tianma built the nation's first AMOLED pilot line, and Tianma Organic Lighting invested in the production of a 5.5th generation AMOLED production line at the end of 2013. In 2016, the line has shipped to smart mobile terminal brand customers, and HD and FHD products have been in volume production. The 6th generation LTPS AMOLED production line of Wuhan Tianma has been on April 20, 2017. According to the announcement, the company is currently Actively promote mass production of the production line, and it is expected to ship to brand customers during the middle of the year. After the expansion of the second-tier project, the production line will have the ability to produce 37,500 sheets of flexible AMOLED panel per month. The flexible AMOLED capability will be greatly improved, and the card position will show industry trends. , The advantages of small and medium-sized panel industry are further consolidated.
The Notch screen took the lead to break through, and the comprehensive screen took the lead. The small and medium-sized panels will continue to see innovation throughout the year. Notch screens, COF screens, and product iteration innovations are expected to bring product prices up.
In terms of technology, according to Tianma officials, on March 20th, Tianma and Huawei jointly launched HUAWEI NOVA 3e, Huawei's first notch full-screen mobile phone. The second-generation full screen adopts notch+ ultra-narrow design to overcome many technical difficulties. On the other hand, according to Qunzhi's consulting data, the company's total LCD screen shipments ranked first in the world in 2017. We believe that the company's technology and production will lead the way and will become the main beneficiaries of this iteration of mobile phone panel technology iterations.
High quality of customer resources and clear channel advantages. Over the years, the company has leveraged its own technology and quality advantages to cooperate deeply with major mobile phone manufacturers both at home and abroad. It has won many awards from outstanding mobile phone manufacturers and cooperated with brand customers to achieve product launch. The company is also a mainstream in many industries. A supplier panel for supply. With the increase in mobile phone market concentration and the company's flexible AMOLED production capacity, we believe that the company's advantages will be more prominent.
Investment suggestion: Buy-A investment rating. We expect the company's net profit from 2018 to 2020 to be 2.004 billion yuan, 2.775 billion yuan and 3.615 billion yuan respectively, which represents a year-on-year growth rate of 148.7%, 38.5%, 30.2%, and an EPS of 0.93 respectively. Yuan, 1.29 yuan and 1.67 yuan. Considering the continuous improvement of the company's product portfolio and significantly improved profitability, AMOLED's flexible volume production breakthrough and volume may be the dominant position in the overall screen technology, and it is expected to enter a new round of rapid development in the future with long-term investment value. Given 26 times valuation in 2018, the 6-month target price is 24.15 yuan.