CIC Securities: Tongfang LED industrial chain formation

LED is currently mainly used in mobile phone backlight, large size, high brightness of notebook computer, LCD TV, outdoor large screen backlight and automotive lamp will become the new growth point of LED, at present, Hisense has launched LED backlight LCD TV, outdoor large screen application with LED backlight has emerged, we expect the next two years is a large size backlight application is imminent. Au Optronics Co is the core operation of the main industry of LED company, with the management team, excellent technical team, MOCVD equipment and accessories of independent property, skilled production process, the luminous intensity of products 14mi1 blue LED chip 140 200mcd, the luminous efficiency of more than 731m/W, 40mi1 high power blue LED chip 3000mcd luminous intensity, luminous efficiency is 65LM/W, achieve the international advanced level of industrialization. LED industry chain has been basically mature, there are currently 8 domestic customers, accounting for about 30% of product sales, the current production is in urgent need of upgrading, is expected in the next three years, domestic demand to reach about 60%. There are two companies in South Korea, Malaysia, currently accounts for 70% of product sales. Domestic LCD TV, computer companies and large screen (height, size) of the scale of production will be combined with the company's LED business to bring huge space for development. LED industrial base in Beijing airport has started construction, is expected in August the new 15-30 MOCVD equipment production workshop, clean workshop will enter the commissioning phase, in October will enter the production stage. 6 chip single chip pre tax profit margin of around 50%. 19 chip single chip pre tax profit margin of around 59%. 35 sets of equipment production is expected next year will reach 5 units, 20 units, 35 units, with net profit estimates in 144 million teeth, 24 million yuan, 252 million yuan yuan. The company is expected to 08, 09, respectively, EPS was 1.12, 1.68, $2.51, net profit to maintain a growth of 50%, do not consider the subsidiary of small plates, the gem listing factors, conservative given to the 09 times of PE, its reasonable value of $35 in 58.8.

Source: Eastern wealth network