Shanghai New Vision Microelectronics (SH:688593) Great Wall Securities·2024-05-27 11:01Investment Rating - The report maintains a "Buy" rating for the company, expecting the stock price to outperform the industry index by over 15% in the next six months [5][10]. Core Views - The company is a leading domestic supplier of display chips, focusing on the research, design, and sales of integrated circuit products. It has a comprehensive product layout and significant technical reserves, being one of the few companies capable of providing driver chips for both TFT-LCD and AMOLED display technologies [5]. - Despite challenges in the display industry, such as weak demand and price declines in some downstream sectors, the overall market environment is expected to improve. The continuous advancement in display technology and the growth of emerging application markets will drive long-term growth in the display industry [5]. - The report highlights the trend of domestic substitution in the display driver chip industry and the company's technological advantages in the semiconductor display field. It anticipates a gradual recovery in profitability as consumer electronics demand rebounds and product prices increase [5]. Financial Summary - In 2023, the company achieved operating revenue of 480.45 million yuan, a year-on-year increase of 12.52%. However, the net profit attributable to shareholders was 27.54 million yuan, down 74.57% year-on-year [2][22]. - For Q1 2024, the company reported revenue of 100 million yuan, a year-on-year increase of 2.89% but a quarter-on-quarter decrease of 22.60%. The net profit attributable to shareholders was -11.46 million yuan, reflecting a year-on-year decline of 157.12% and a quarter-on-quarter decline of 148.95% [2][22]. - The report projects net profits for 2024-2026 to be 60.07 million yuan, 158.96 million yuan, and 233.24 million yuan, respectively, with corresponding EPS of 0.13 yuan, 0.35 yuan, and 0.51 yuan [5][22]. Market Potential - The report emphasizes the broad market space for display driver integrated circuits (DDIC), driven by the growth of terminal application markets. The demand for new display driver chips, such as Mini-LED and Micro-LED, is expected to rise due to the development of smart wearable devices and the 5G upgrade cycle in smartphones [14]. - The report notes that the domestic display industry has rapidly developed, with China becoming a global manufacturing center for TFT-LCD panels. However, there is a significant mismatch in supply and demand for domestic display chips, indicating substantial potential for domestic substitution [14].