Jinwu Financial News | According to the First Shanghai Development Report, BOE Precision Electronics (00710) is BOE's only vehicle display module and system operation platform, providing customers with vehicle display assemblies and smart vehicle display systems. Revenue of HK$10.76 billion in 2023 increased by 0.4%; net profit of HK$475 million, a decrease of 18%, lower than market expectations. The pressure on performance was mainly due to pressure on product prices in the second quarter, depreciation of the RMB, inventory depreciation, and cost pressure brought about by a steep decline in the commissioning of the Chengdu factory.
The bank mentioned that the overseas automotive display market is far larger than the domestic market. The company set up an overseas offensive mission team. It is expected that 39 client projects will enter mass production in 2024, and the overseas market will achieve double-digit growth. Furthermore, the continuous optimization of the Chengdu plant will make a positive contribution to the 2024 results.
According to the bank, the company's revenue for 2024-2025 is estimated to be HK$12.6 billion, HK$13.6 billion and HK$15.2 billion respectively, while net profit attributable to the parent company is HK$540 million, HK$615 million and HK$760 million respectively. The target price given to the company is HK$9.06, corresponding to 15 times the PE valuation in 2024. There is room for an increase of 47.8% compared to the current price, and the purchase rating is given.