"Comprehensive Analysis of LED Screen Chip Market" The LED chip business is leading, and its performance has turned from loss to profit. Lanjing is a leading supplier in the domestic LED screen chip market, and has high-quality customers such as Leyard, Mulinsen, and Unilumin Technology. The industry is the first to launch a dedicated chip for high-definition LED screens. The market share of medium-power and high-voltage chips continues to grow. Flip-chips have reached the domestic first-class technology level. Backlight chips have successfully entered the mainstream backlight supply chain. After the LED epitaxial chip expansion project reaches production capacity in 2020, it will add an annual production capacity of 3 million pieces.
It is estimated that in 2016, the company will achieve a net profit attributable to the parent company of between 263 million yuan and 268 million yuan, turning losses into profits. Merged and acquired Blue Crystal Technology to realize the integration of the industrial chain. Acquisition of sapphire material supplier Lanjing Technology, opening up the upstream material link, improving the layout of the chip + epitaxial wafer + material industry chain in the upper and middle reaches, and the synergistic effect will gradually appear.
The gross profit margin of Blue Crystal Technology’s sapphire substrate business is as high as 45.24%. In the first half of 2016, it has contributed 70.3358 million yuan in operating income and 23.906 million yuan in net profit to the company since the date of consolidation, effectively improving the company’s profitability. The relationship between supply and demand is tense, and the price of chips is rising. LED lighting and high-definition LED screens show a market size of 100 billion yuan, and the current market penetration rate is still at a low stage.
The penetration rate of high-definition LED screen display and LED lighting on the demand side continues to increase, and chip manufacturers on the supply side are cautious in expanding production. Leading Taiwan Wafer Optoelectronics and Fujian Sanan Optoelectronics have implemented price increases to varying degrees for some products, and other chip manufacturers are expected to follow suit. The price increase will effectively enhance the company's profitability.
Earnings forecasts and investment advice. The company's performance has turned from loss to profit, benefiting from the increase in the profitability of LED chip prices, the integration of the LED industry chain through extension mergers and acquisitions, and the expansion of business areas through multi-point layout. It is expected that the net profit attributable to the parent company will maintain a compound growth rate of about 63% in the next three years.
Covered for the first time, give "overweight" rating. Acquired MEMSIC in the United States to lay out the sensor market. The global MEMS device market is expected to reach more than 22 billion US dollars in 2018, with a compound annual growth rate of about 13%. China has become the market with the largest demand for MEMS devices.
The company intends to acquire MEMSIC, an American sensor company, to increase its footprint in the fields of consumer electronics and automotive electronics. The business scale of MEMSIC acceleration sensors and magnetic sensors ranks among the top in the world. If the acquisition is completed, it will greatly enhance the company's strength in the sensor industry and provide another growth point for the company. Risk warning: The price of LED chips may rise less than expected; the integration of the acquired Blue Crystal Technology may be less than expected, and the performance may be less than promised; the progress of the proposed acquisition of MEMSIC may be less than expected.