MTC(002429) 华创证券·2024-06-17 23:01Investment Rating - The report gives a "Strong Buy" rating for the company with a target price of 7 yuan, representing a 15x PE for 2024 [1][8] Core Viewpoints - The company is a leader in the display industry, with a strong position in TV ODM and a vertically integrated LED supply chain, which has opened a second growth curve [1] - The core advantage lies in the company's ability to reduce costs and scale production in the Mini LED sector, which is expected to drive profit growth [1][6] - The company's LED business has shown rapid growth, with a CAGR of 20.8% since 2018, and is expected to benefit from the increasing penetration of Mini LED technology [1][6] Business Segments LED Business - Upstream (Chip Segment): The company's subsidiary, Zhaochi Semiconductor, is a top-tier player in the LED chip market, with a leading market share and profitability. It is the only chip manufacturer in the industry to achieve full production and sales throughout the year, with significant profitability after non-recurring items [1][6][16] - Midstream (Packaging Segment): Zhaochi Guangyuan, the company's packaging subsidiary, was one of the first in China to achieve mass production of Mini LED backlight modules and has secured a significant share of the market with leading customers [1][6][16] - Downstream (Backlight + Direct Display Applications): The company benefits from the global surge in Mini LED TV orders and has made breakthroughs in COB packaging technology, which is expected to enhance its competitiveness as production lines expand [1][6][16] Traditional Business (TV ODM) - The company's TV ODM business is stable and serves as a "cash cow," supporting its expansion. It is expected to benefit from the recovery in TV demand and increased orders from North American customers [1][6] - The company is also diversifying its revenue streams through its smart home networking business and internet TV ecosystem, including short video production and distribution [1][6] Financial Projections - The report forecasts the company's net profit for 2024-2026 to be 2.121 billion yuan, 2.573 billion yuan, and 3.081 billion yuan, respectively, with corresponding PEs of 10x, 9x, and 7x [1][8] - The company's revenue is expected to grow at a CAGR of 14.2% from 2023 to 2026, driven by the rapid penetration of Mini LED technology and the company's full industry chain layout [1][8] Industry Insights - The Mini LED industry is at a turning point, with cost reductions and technological breakthroughs driving commercialization and market penetration [6][7] - The LED display market is expanding, with Mini LED technology becoming a key driver of growth, particularly in high-end TV and large-scale commercial display applications [6][7] - The TV ODM industry is consolidating, with leading Chinese manufacturers gaining market share, and the company is well-positioned to benefit from this trend [6][7]