Shanghai New Vision Microelectronics (SH:688593) Guotai Junan Securities·2024-10-09 05:23Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of 19.60 CNY [3][4]. Core Views - The company specializes in display driver solutions and is expected to benefit from the localization of the display supply chain. The projected EPS for 2024, 2025, and 2026 is 0.09, 0.34, and 0.46 CNY respectively [3][12]. - The domestic display panel capacity is dominated by China, with local manufacturers accelerating the localization of DDIC (Display Driver IC) production [2][3]. - The company is one of the few in mainland China capable of providing both integrated and separated display driver solutions, which positions it well for future growth [3][11]. Summary by Sections Industry Overview - The display panel industry is characterized by heavy investment, strong cycles, and weak profitability, with China leading in LCD production capacity, accounting for 70% of global output [18][20]. - In the OLED sector, Chinese manufacturers have gained significant market share, with OLED panels expected to dominate smartphone displays, reaching over 50% market share by 2024 [23][27]. Company Analysis - The company has a comprehensive product layout, transitioning from separated to integrated DDIC solutions, and has begun mass production of AMOLED DDIC, which is gaining market recognition [3][11]. - Revenue projections indicate significant growth, with total revenues expected to reach 532 million CNY in 2024, 901 million CNY in 2025, and 1,213 million CNY in 2026, reflecting growth rates of 10.7%, 69.4%, and 34.6% respectively [12][9]. - The company is positioned to benefit from the increasing demand for AMOLED displays in consumer electronics, particularly smartphones [11][12]. Financial Projections - The report forecasts a recovery in gross margins starting in 2024, with expected margins of 20.1%, 32.1%, and 34.8% for the years 2024, 2025, and 2026 respectively [12]. - The projected net profit for the company is expected to grow significantly, with estimates of 42 million CNY in 2024, 155 million CNY in 2025, and 210 million CNY in 2026, corresponding to a growth of 50.8%, 272.9%, and 35.5% [12][9].