TCL Group (000100) 2018 Annual Report Comments: Performance Growth Maintains Steady Reorganization and Accelerates Panel Business Development
Event: The company released its 2018 annual report, and the company realized a total of 1134 operating income in 2018.
47 ppm, an increase of ten years.
54%, net profit attributable to mother 34.
68 ppm, an increase of 30 in ten years.
Comments: The performance growth remains stable. In the future, the focus on the semiconductor display business company’s 2018 revenue will remain almost the same, mainly because the company’s smart terminal business has maintained a slow growth, while the company continues to restructure, replacing 39 non-core companies, affecting short-term revenue.
The company’s gross profit margin in 2018 was approximately 18.
31%, down 2 each year.
23pct, mainly because the high gross profit of Huaxing Optoelectronics was affected by the decline in panel prices, and the gross profit margin shifted significantly.
The company’s cost control in 2018 was relatively good, and the sales expense ratio fell by 0.
68pct, mainly because the company’s advertising costs have decreased; the overhead rate has dropped by 0.
55pct, mainly due to the decrease in the company’s intermediary fee; the financial expense rate fell by 0.
63pct, mainly due to reduced exchange losses.
The company’s major asset reorganization plan was approved by the shareholders’ meeting on January 7, 2019, and related issues are proceeding as planned.
Before the reorganization was completed, the company’s industries included three major business groups: semiconductor display business, smart terminal business, and emerging business. After the reorganization, the company will be adjusted to semiconductor display and materials business, industrial finance and investment venture capital business, and three emerging business groups., Focus on the development of semiconductor display business, enhance the company’s strength in the display field.
Large-size LCD and flexible OLED help the company’s long-term development. Huaxing Optoelectronics is the world’s leading display panel company. There are currently six production lines, including T1 and T2.
The fifth-generation line has a capacity of 160K / month and 150K / month respectively, and has achieved full production and sales; T3 is a 6th-generation LTPS production line with a production capacity of 45K / month and mainly supplies high-end smartphone panels; T4 is a 6-generation AMOLED production line.It is currently under construction and is expected to be mass-produced in 2019 with a design capacity of 45K / month; T6 and T7 enter 11th-generation LCD production lines with a design capacity of 90K / month. Currently T6 is about to be mass-produced and T7 has started construction.
As the average size of TVs continues to grow, the demand for large-size panels continues to grow.
The company has seized the trend of large size and built multiple high-generation lines, of which there are currently two.
The 5th generation line is in full production and sales. The T6 11th generation line under construction is trying to achieve mass production in 2019, and the T7 11th generation line has started.
After the T6 and T7 production lines are completed and put into production, the company’s production capacity in the field of large-size LCD panels will rank at the world’s 天津夜网 leading level.
In the field of flexible OLEDs, the company is building a T4 production line in Wuhan and is expected to achieve mass production in 2019.
As a new type of high-end display technology, flexible OLED is currently increasing its penetration rate in smartphones, and with the advent of folding screen phones, the demand for flexible OLEDs will continue to increase.
At present, the global flexible OLED production capacity is mainly monopolized by Samsung. Mobile phone manufacturers are worried about the supply pattern of a single supplier and are working hard to develop new suppliers.
After the company’s T4 production line is put into production, it is expected to quickly enter the supply chain of domestic mobile phone manufacturers and obtain quality customers.
Profit forecast, evaluation and rating companies After the reorganization is completed, the business structure will become clearer, and Huaxing Optoelectronics will become the core asset of the listed entity.
The company’s industrial finance and venture capital sector will be retained, and the company’s capital utilization efficiency will be improved, and stable and sustainable investment returns will be gradually obtained through investment.
Relying on the continuous development in the field of large-size LCDs and flexible OLEDs, Huaxing Optoelectronics will continue to develop its competitiveness in the field of panels, and the company’s future development is worth looking forward to.
As asset restructuring will reduce the company’s revenue and profit, we lower the company’s EPS for 2019-20 to 0.
32 yuan (previous forecast was 0.
34 yuan), while forecasting that the company’s EPS in 2021 will be 0.
36 yuan, maintaining the “overweight” level.
Risk Warning: The panel price has fallen unexpectedly; the strategic cooperation with Xiaomi has fallen short of expectations.