BOE(000725) 平安证券·2024-05-14 00:32Investment Rating - The report initiates coverage on BOE A (000725 SZ) with a "Recommend" rating [2] Core Views - BOE is a global leader in display panels, with its LCD and OLED businesses positioned to benefit from industry trends [4] - The company's LCD business is expected to stabilize as industry cycles weaken, while its OLED business is poised for growth and profitability [4][7] - BOE's OLED business is rapidly expanding, with significant technological and production advantages, and is expected to achieve profitability soon [4][7] Business Overview - BOE has a dominant position in the LCD market, with 6 G8 5/G8 6 and 2 G10 5 high-generation LCD production lines, making it the largest in the industry [4] - The company's OLED business is growing rapidly, with three G6 AMOLED production lines and a planned G8 6 high-generation OLED line targeting mid-sized IT products [4][7] - BOE's OLED shipments reached nearly 120 million units in 2023, with expectations to grow to 160 million units in 2024, covering almost all major domestic smartphone manufacturers [4] Financial Performance - BOE's revenue has shown significant fluctuations, peaking at 2210 4 billion yuan in 2021, with a decline to 1745 4 billion yuan in 2023 [4] - The company's net profit also fluctuated, reaching a peak of 25 96 billion yuan in 2021 and dropping to 2 55 billion yuan in 2023 [4] - For 2024-2026, the report forecasts revenue growth of 21 4%, 15 6%, and 9 2%, with net profit growth of 160 3%, 46 8%, and 29 5%, respectively [5] Industry Trends - The LCD industry is maturing, with production capacity concentrated in China, leading to a weakening of the industry's cyclical nature [4][17] - OLED technology is rapidly gaining ground in small-sized applications like smartphones and is expanding into mid-sized IT products, with significant growth potential [4][29] - The global OLED market is expected to grow, with BOE well-positioned to benefit from this trend due to its technological and production capabilities [4][29] Strategic Initiatives - BOE has adopted a "Screen of Things" strategy, focusing on integrating screens into various IoT applications and expanding its ecosystem [12] - The company is investing heavily in MLED technology, with a focus on both backlight and direct display applications, aiming to enhance its competitive edge in the display industry [44][45] Valuation and Recommendations - The report values BOE at 24 8X, 16 9X, and 13 0X PE for 2024-2026, respectively, based on its strong market position and growth potential in both LCD and OLED sectors [53] - The "Recommend" rating is based on BOE's leading position in the display panel industry, its technological strengths, and the favorable industry outlook [53]