SANAN(600703) 长江证券·2024-03-14 16:00Investment Rating - The report maintains a "Buy" rating for Sanan Optoelectronics (600703 SH) [9] Core Views - Sanan Optoelectronics is a global leader in the optoelectronic display field and has been transitioning into the compound semiconductor industry since 2014, expanding its business from LED chips to communication RF, optical communication, and power electronics [2][3] - The LED industry is expected to recover, with new applications such as Mini/Micro LED and small-pitch displays driving structural growth Sanan Optoelectronics, as a global leader in LED chips, is well-positioned to benefit from this recovery [4] - The RF business is expected to grow due to communication system upgrades and demand recovery, with Sanan Optoelectronics being a key domestic player in GaN and GaAs RF foundry services [5] - The SiC (silicon carbide) business is nearing a growth inflection point, with Sanan Optoelectronics being one of the few companies globally with full-process integration capabilities in SiC production [6] - The optoelectronic chip market is expected to grow significantly in the data era, with Sanan Optoelectronics offering a wide range of laser and photodetection chip foundry services [7] LED Industry - The LED industry is bottoming out, with chip prices stabilizing in Q4 2023 and new applications like Mini/Micro LED driving future growth [4] - Sanan Optoelectronics is a global leader in LED chips, with advanced Mini/Micro LED technology and a strong position in the automotive LED market [4][27] - The global LED market is expected to grow to $21 013 billion by 2027, with a CAGR of 8% from 2022 to 2027 [37] RF Business - The RF business is expected to grow due to communication system upgrades, satellite communication advancements, and demand recovery in consumer electronics [5] - Sanan Optoelectronics has a strong position in GaN and GaAs RF foundry services, with a monthly capacity of 15,000 wafers for GaAs RF and 150KK for filters [5][45] - The global RF chip market is expected to reach $25 8 billion by 2025, with a CAGR of 8 06% from 2018 to 2025 [39] SiC Business - The SiC business is nearing a growth inflection point, with 2024 expected to be the first year for domestic SiC chips to be used in vehicles [6] - Sanan Optoelectronics has full-process integration capabilities in SiC production, including substrate, epitaxy, and chip manufacturing [6][60] - The global SiC market is expected to grow to $38 1 billion by 2026, with a CAGR of 40 96% from 2021 to 2026 [51] Optoelectronic Chips - The optoelectronic chip market is expected to grow significantly in the data era, driven by consumer electronics and data center construction [7] - Sanan Optoelectronics offers a wide range of laser and photodetection chip foundry services, covering various rates and wavelengths [7][62] - The global laser market is expected to reach $18 48 billion in 2021, with semiconductor lasers accounting for 43% of the market [62] Financial Projections - The report projects Sanan Optoelectronics' revenue for 2023-2025 to be RMB 14 114 billion, RMB 18 831 billion, and RMB 22 708 billion, respectively, with net profits of RMB 335 million, RMB 1 307 billion, and RMB 2 234 billion [8]