Avic Securities: weir shares to buy rating
2022-02-08 AvIC Securities Zou Runfang research on Weil shares and released a research report “2021 performance forecast review: Performance significantly improved, CIS and TDDI driven growth”, this report gives a buy rating on Weil shares, the current share price of 232.52 yuan.Weil Shares (603501) company released performance forecast: the company is expected to achieve the full year 2021 attributable to the shareholders of the listed company net profit of 4.468 billion yuan to 4.868 billion yuan, year-on-year growth of 65.13% to 79.91%.It is expected to realize a net profit of 3.918 billion yuan to 4.268 billion yuan, up 74.51% to 90.10% year on year.In-car CIS opens up a growth path: IHS forecasts demand for in-car cameras to grow from 400 million in 2020 to 1.1 billion in 2025, an average annual growth rate of 22.4%.According to Yole’s estimation, the market size of in-vehicle CIS is usd 1.44 billion in 2020, with a year-on-year growth rate of 10.4%.We estimate that the vehicle CIS market will reach 12.420/15.525 billion yuan in 2020/2023.The global vehicle CIS market is an oligopoly, with Onsom accounting for about 60% and the company accounting for about 29%.SONY and Samsung are not expected to pose a great threat to the company in the short term due to their short time of entering CIS.By cooperating with international leading companies in automotive vision technology (Nvidia, Renesas, etc.), the company provides high-quality image solutions with higher cost performance for rearview cameras, landscape display systems and electronic rearview mirrors.The company will benefit from the high growth of CIS industry and its position in the industry.TDDI demand exceeds supply, volume and price increase Become new growth drivers: According to Trendforce, since 2020, due to the unexpected recovery of the mobile phone market and the rapid decline of Huawei’s mobile phone market share, other mobile phone manufacturers are actively hoarding, resulting in the demand for mobile phone TDDI demand, volume and price increase.According to Omdia, the TDDI business will account for 8 percent of the global market by 2020, which still has room to grow.In 2020, TDDI business revenue of the company reached 744 million yuan, and with the advantage of the company’s channel, it reached 613 million yuan in the first half of 2021. We expect TDDI revenue of the company to double in 2021 and gross profit margin to increase significantly.With the launch of TDDI’s new products and the further expansion of customers, touch and display solutions also brought new profit growth points to the company during the reporting period.Investment advice:It is estimated that the actual revenue of the company in 2021-2023 will be RMB 287.07/356.69/44.462 billion yuan, with a year-on-year growth of 44.81%/24.25%/24.65%.The net profit of returning to the mother is 47.49/60.69/7.748 billion yuan, with an increase of 75.51%/27.78%/27.67%. Currently (On February 7, 2022), the corresponding PE is 45.07x / 35.27x / 27.63x.First coverage gives a “buy” rating.Risk tips: vehicle camera penetration rate is less than expected, production capacity is less than expected, the risk of intensified competition in the industry, the risk of goodwill impairment.The unit in the recent 90 days a total of 23 institutions to give ratings, buy rating 19, overweight rating 4;The average institutional price target over the past 90 days is 359.47.According to the Securities Star valuation analysis tool, Weil Shares (603501) has a good company rating of 4 stars, a good price rating of 2 stars, and a comprehensive valuation rating of 3 stars.(Rating range: 1 ~ 5 stars, maximum 5 stars) The above content is collated by Securities Star according to public information, if you have any questions, please contact us.