【行业研究报告】京东方精电-NDR Takeaways: Chengdu auto display capacity ramp-up on track; auto intelligence to drive growth

13Jan202313Jan2023CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateBOEVaritronix(710HK)NDRTakeaways:Chengduautodisplaycapacityramp-upontrack;autointelligencetodrivegrowthWehostedNDRmeetingswithBOEVaritronixon12Jan.Mgmt.maintainedpositiveviewonautomotiveintelligenceandsmart-cockpit,andexpectedlimitedimpactfromrecentindustryupdates(ChinaNEVsubsidyexpiryandTeslapricecut)thankstoitsfocusonbothtraditionalandNEVcustomers,pricingstrategyandcostadvantage.Inaddition,Chengduautodisplayturnedprofitablein4Q22andisontracktoreachmaximumcapacityof15mnby2024E.Overall,weremainpositiveonautodisplayupgradetrend,newclientwins,andChengduplanttodrivegrowth.ReiterateBUYwithTPHK$26.01basedon25xFY23EP/E.LimitedimpactfromChinaNEVsubsidyexpiry;autointelligencetrendtodrivedisplaydemand.Mmgt.believedsmart-cockpitisnotonlydrivenbyNEVbutmorebyautointelligencetrend.Mgmt.expectsChinaNEVsubsidyexpiryandTeslapricecutwillhavelimitedimpactonitsbusinessgivenitsfocusonbothtraditionalautomotiveandNEVcustomers,pricingstrategyandcoststructureadvantage.Inaddition,BOEVxcollaboratedwithBAICmotorindevelopingCameraMonitorSystem(CMS)andmgmt.expectsproductmassproductionin2H23EafternewregulationapprovalofCMS-enabledvehiclesontheroadafter1Jul2023.Overall,weremainpositiveonautointelligencetodrivedisplaydemandandASPupsideinFY23E.Chengduautodisplayplant’scapacityramp-upontrack.Mgmt.statedthatChengduplantturnedprofitablein4Q22andexpectsallkeycustomers’verificationcompletionin2023.Mgmt.believedthattheChengduplant’scapacityramp-upof~12mnpieceswillbedrivenbyclientorderwinsinFY23Eandremainsconfidentonmaximumcapacityof15mnpiecestogenerateRMB5bnsalesinFY24E.NonegativeimpactonoperationsfromrecentCOVID-19inChina.Mgmt.reiteratedlimitedimpactonproductionfromtherecentpandemicthankstoitsstrongsupplychainmanagement.Mgmt.believedlittleimpactonclientorderdeliverysincesoftautodemandduringholidayseasonsinJanuary.Valuation/Keyrisks.Weestimaterevenue/earningstogrowat33%/47%CAGRover2021-24E,drivenby37%CAGRinautomotivedisplay.MaintainBUYwithTPHK$26.01.Upcomingcatalystsincludecapacityexpansion,technologyupgradeandproductpenetration.TargetPriceHK$26.01(PreviousTPHK$26.01)Up/Downside54.1%CurrentPriceHK$16.88ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkLilyYANG,Ph.D(852)39163716lilyyang@cmbi.com.hkHanqingLIlihanqing@cmbi.com.hkStockDataMktCap(HK$mn)12,440.6Avg3mthst/o(HK$mn)13.652wHigh/Low(HK$)18.86/5.84TotalIssuedShares(mn)737.0Source:FactSetShareholdingStructureBOETechnologyGroup54.3%KoChunShun10.0%Source:HKExSharePerformanceAbsoluteRelative1-mth24.9%13.0%3-mth26.5%-1.8%6-mth14.7%11.1%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(HK$mn)4,5277,73810,56514,08118,011YoYgrowth(%)26.770.936.533.327.9EBITDA(HK$mn)2165137601,0321,382Netprofit(HK$mn)68.6327.8553.7756.41,032.4YoYgrowth(%)174.3377.668.936.636.5EPS(Reported)(HK$)0.090.450.761.041.42ConsensusEPS(HK$)0.000.450.710.981.35P/E(x)24.914.222.216.211.9P/B(x)0.40.82.01.51.4Yield(%)215.8236.774.0184.9252.4ROE(%)2.510.715.618.822.4Netgearing(%)(61.6)(34.3)(40.1)(13.5)(21.1)Source:Companydata,Bloomberg,CMBIGMestimates