京东方精电：1H24 preview： margin weakness priced in; expect gradual ASP/margin recovery in 2H

Investment Rating - The report maintains a "BUY" rating for BOE Varitronix, with a target price of HK$9.9, indicating a potential upside of 121$4.47 [12][11][5]. Core Insights - The company is expected to report a 15% year-on-year revenue growth in 1H24, driven by high-end displays, overseas client orders, and the ramp-up of the Chengdu plant. However, net profit is projected to decline by 16% year-on-year [2][11]. - For 2H24, revenue and net profit are anticipated to improve due to order seasonality, a better product mix, and rising utilization rates [2][11]. - The report highlights BOE Varitronix's leadership in the global auto display market, with expectations for ASP and margin recovery in the second half of the year [2][11]. Financial Summary - Revenue is projected to grow from HK$10,760 million in 2023 to HK$12,873 million in 2024, and further to HK$15,561 million in 2025, reflecting a compound annual growth rate [14]. - Net profit is expected to recover from HK$401 million in 2024 to HK$519 million in 2025, and HK$623 million in 2026 [14]. - The operating margin is forecasted to improve slightly from 3.9% in 2024 to 4.0% in 2025 and 4.2% in 2026 [14]. Market Position and Strategy - BOE Varitronix remains the global number one auto display supplier in terms of total and medium- to large-size shipments as of 2Q24 [2]. - The company is focusing on expanding its overseas market presence, with a target for overseas sales to reach 50% by FY26E [2][11]. - The Chengdu plant is noted as the world's largest and most advanced auto display module facility, currently operating at full capacity, which is expected to enhance profitability in 2H24 [2][11].