BOE VARITRONIX(00710) 光大证券·2024-08-27 08:08Investment Rating - The report maintains a "Buy" rating for the company [1] Core Viewpoints - The company has solidified its leading position in the global automotive display market, with significant growth in overseas markets and Tier 1 business [1] - Revenue for 1H24 reached HKD 6.157 billion, an 18% YoY increase, driven by strong domestic customer orders and overseas market expansion [1] - Automotive display revenue grew 24% YoY to HKD 5.752 billion, while industrial display revenue declined 28% YoY to HKD 406 million [1] - Net profit attributable to shareholders decreased by 15% YoY to HKD 172.1 million, with a net profit margin of 2.79% [1] - The company's global market share in automotive TFT displays increased to 17.6%, with a 21.1% share in large and medium-sized (≥8 inch) displays [1] - OLED product revenue doubled in 1H24, and LTPS products saw a 15%+ market share increase in China [1] - The company's gross margin improved from 9.1% in 1H23 to 11.4% in 1H24, driven by increased capacity utilization at the Chengdu base [1] - The company is accelerating its overseas business, with double-digit growth in revenue and ASP in overseas markets, and securing orders from international brands like Toyota and Hyundai [1] - The company has established a new overseas intelligent automotive solutions BG and is building a production base in Vietnam, expected to be operational by 2025 [1] Financial Performance - Revenue for 2024E is projected at HKD 12.411 billion, with a 15.3% YoY growth [2] - Net profit attributable to shareholders for 2024E is forecasted at HKD 388 million, a 31.1% YoY increase [2] - EPS for 2024E is estimated at HKD 0.49, with a P/E ratio of 9 [2] - The company's total assets are expected to reach HKD 9.567 billion in 2024E, with total liabilities at HKD 4.906 billion [5] - Operating cash flow for 2024E is projected at HKD 1.463 billion, with free cash flow at HKD 974 million [6] Market Data - The company's total market capitalization is HKD 3.388 billion, with a total share capital of 792 million shares [3] - The stock price range over the past year was HKD 4.02 to HKD 8.74 [3] - The 3-month turnover rate is 15.3% [3] Industry and Company Outlook - The company is expected to benefit from the easing of price wars among domestic automakers, with product price pressures likely to ease in 2H24 [1] - The company's Tier 1 business and overseas operations are expected to continue driving growth, supported by its parent company BOE Group's technological and cost advantages [1] - The company's long-term development logic remains clear, with potential for further profitability improvement as new production lines ramp up [1]