20230612-招银国际-京东方精电-00710.HK-A_clear_2025_strategic_roadmap__Reiterate_BUY_on_recent_correction_6页_1mb

BOE Varitronix (710 HK) Strategic Update & Buy Recommendation

Strategy & Financial Outlook

BOEVx provides an investor call update on its business and 3-year strategy roadmap. Management outlines a clear 2025 strategy with the following key targets:

1. Revenue target: HK$20bn (23% 5-year CAGR)
2. Global market share: 25% (from ~20% in 2022)
3. Year 2025: 50% overseas sales mix; 50% OLED/mini/LTOP sales mix

Near-Term Outlook

Orders remain strong despite margin pressures from auto price cuts and recent capacity expansion in Chengdu. Management expects:

• Strong new orders and Chengdu UTR ramp-up (100% in 3Q23E) to drive H2 23 margin recovery
• Increased ASP/GPM due to easing semi shortage, cost optimization from material localization, pricing adjustments, and parent company support

2025 Roadmap

Focus on overseas expansion and product upgrades:

• Overseas sales mix target increased to 50% (currently 30%)
• Winners secured in the US tier-1 supply chain (1Q23)
• High-end LTOP/OLED products to penetrate new client base

Valuation & Rating

• Maintains BUY recommendation with target price HK$23.69 (unchanged)
• Trading at 11.7x/9.1x 2023/24E earnings:
  • 11.7x 2023E: Attractive vs valuation peers
  • 9.1x 2024E: Valuation continues to be appealing

Key Catalysts

• Order wins
• Chengdu plant ramp-up
• Overseas market expansion

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