Appo(SH:688007) East Money Securities·2024-06-04 10:00Investment Rating - The report assigns a "Buy" rating to the company with a target price of 20.5 CNY, reflecting a total market value expectation of 9.475 billion CNY for the company's three business segments [79]. Core Insights - The company has developed its ALPD® technology over five generations, with the latest ALPD®5.0 technology being applied in various fields, including automotive, cinema, and home projection [7][44]. - The automotive optical business is identified as a new growth driver, with significant partnerships established with major automotive manufacturers like Huawei and BYD [8][36]. - The cinema business is recovering strongly, with high gross margins from the laser projection rental model, which has become a cash cow for the company [14][27]. - The home projection market is currently facing challenges, but the company is focusing on its competitive advantages to mitigate losses [44][50]. Summary by Sections Company Development Stages - The company has evolved through three stages: 1. 2007-2016: Focused on technology R&D and commercialization, including partnerships with LG and the establishment of a subsidiary for cinema projection [4]. 2. 2017-2021: Rapid business expansion through partnerships, including a joint venture with Xiaomi for consumer laser TVs [4]. 3. 2022-Present: Entering the automotive optical market with innovative solutions for in-car displays and laser headlights [4][8]. Technology and Innovation - The ALPD®5.0 technology significantly improves brightness and color quality while reducing issues like speckle and color fringing, establishing a strong patent barrier with 2,862 patent applications globally [7][8]. - The company has launched various applications for its laser technology, including automotive displays, cinema projection, and home use, with a focus on innovative and forward-looking applications [8][44]. Market Performance - The cinema market is recovering, with the company’s laser projection solutions gaining traction, leading to a high gross margin business model [14][27]. - The home projection market is experiencing a downturn, but the company is leveraging its strengths to focus on high-end products and reduce losses [44][50]. Automotive Business - The automotive optical solutions are positioned as a key growth area, with successful projects like the Huawei Aito M9 featuring the company's projection technology [36][43]. - The company has secured multiple high-quality pre-installation projects, indicating strong market demand and growth potential in the automotive sector [36][43]. Financial Projections - Revenue growth is expected across various segments, with the automotive business projected to generate significant income in the coming years, supported by successful product launches and partnerships [75].