Six days and six limits! Capital relay rainbow shares in the end what speculation?

 Six days and six limits! Capital relay rainbow shares in the end what speculation?

Rainbow shares as early as 1996 in the A-share listing, the stock age has been more than 24 years. In this antique listed company, Chinas first OLED display screen and the first G5, G6 liquid crystal substrate glass were born successively, which witnessed the rise and fall of Chinas display industry.

Rainbow shares six days and six boards once again refreshed the investors cognition. A market person thinks, rainbow stocks rise is mainly in the fund relay. On the dragon and tiger list, a large number of hot money bought into the leading closed board, and a small amount of other hot money participated in the long and long list, resulting in a large net inflow of funds.

Rainbow Co., Ltd., founded in 1992, was initiated by Rainbow Electronic Group Co., Ltd. Shaanxi Province color picture tube General Factory and other companies. Rainbow Co., Ltd. introduced the key equipment and advanced technology of Toshiba company of Japan at that time, forming the production capacity of 900000 64cmfs, 56cm color picture tubes annually, which was the first time in technology.

However, in the 21st century, the display industry has begun to transition from the picture tube era to the liquid crystal era, and the color picture tube is no longer popular. However, due to the companys deep involvement in the field of color kinescope, it has not kept pace with the times. Until 2009, the companys main business is still color kinescope.

The financial crisis of 2009 completely damaged the company. In the same year, the revenue of Caihong stock decreased by 56.74%, with a huge loss of 715 million yuan. In 2010, rainbow shares learned from the bitter experience and set to increase 3.498 billion yuan to enter the TFT-LCD glass substrate industry. It was not until 2013 that the companys revenue from substrate glass exceeded that of color kinescope, and the transformation of product structure was completed.

However, the glass substrate industry is equally competitive. From 2011 to 2016, the companys net profit after deducting non-profit losses for consecutive years, and its operation was not improved.

In 2017, rainbow shares will increase again by 19.041 billion yuan, introducing local state-owned assets led by Xianyang financial holding. Since then, the companys identity has changed from a central enterprise to a local state-owned enterprise. The project of LCD production line 8.5 will be used in LCD production line. After the completion of the project, the companys business structure will change from the original single main business of substrate glass to the dual main business of LCD panel and LCD substrate glass.

According to the calculation of the company, the internal rate of return of TFT-LCD project with an investment of 28 billion yuan is only 6.98% after reaching the designed production capacity.

In fact, rainbow shares into the LCD panel industry is also a huge risk. In 2017, OLED display has begun to rise, and LCD industry has been replaced. Rainbow shares invested a lot in the LCD industry which may be eliminated, and the yield is not high.

It turns out that these concerns are not groundless. Shortly after the capital increase in 2017, rainbow shares was in trouble again. From 2018q3 to 2020q2, the companys gross profit margin has been negative.

There are two main reasons for the loss of gross profit. One is that the companys new production line is gradually put into operation, and the output is still climbing, but the depreciation is very large; the second is that since 2017, the price of TV panel has been in the decline channel for a long time, and the degree of industry depression has exceeded rainbow stocks expectation.

Data source: mass innovation consulting, interface news research department

According to the calculation of Caihongs fixed increase time in 2017, the companys 8.6 generation TFT-LCD project will sell three sizes of TV panels: 100 , 50 , and 58 . Among them, 50 TV panel is the main product. In the third year of the project, namely, 2019, the comprehensive price is expected to be 1024 yuan / piece. The actual situation is that the panel price of 50 TV will hover around 600 yuan in 2019.

Data source: company announcement

But that changed in 2020Q3. In the quarter, the companys gross profit margin returned to normal, and achieved a gross margin of 8.8%.

Data source: wind, interface news research department

If we apply rainbows calculation at that time, assuming that the LCD panel will be stable at this price in the future, the annual net profit of the companys only 8.6 generation TFT-LCD project will reach 666 million yuan.

But whether this round of LCD panel price rise can continue to be controversial.

Rainbow shares said in the risk warning announcement: although the mainstream size panel prices maintain an upward trend, the increase will probably be narrowed, and there is uncertainty in the companys future product price fluctuation.

Data source: ovirevo

Considering the two factors of supply and demand, according to the forecast of Ovi Revo, the overall supply and demand of TV panel in the first half of 2021 will remain tight. It is estimated that the supply and demand of 20q1 will be slightly higher than the market equilibrium line, and the supply and demand of 20q2 will be slightly lower than the market equilibrium line driven by downstream demand.

Therefore, in the context of tight supply and demand dynamics, the price rise may last for a period of time. The rising price of LCD panel is expected to drive the price of glass substrate, which is the real performance contribution point of rainbow shares.

According to the companys previous calculation, after the 8.5 generation liquid crystal glass substrate production line invested by fixed increase fund is put into operation, it is expected to generate a maximum annual net profit of 1.3 billion yuan.

Data source: company announcement

If the two raised investment projects and the original business of rainbow stock are added together, the companys net profit in 2021 is expected to reach more than 2 billion yuan under the condition of maintaining the current price of LCD panel in 2021, which may be the most important logic of rainbow stock speculation at present. According to the closing price of rainbow shares on December 2, the market value of the company has reached 28 billion yuan, which is less than 14 times of the price earnings ratio in 2021, which seems not unreasonable. But the premise is that the price of LCD panel will remain at the current high level after 2021. Source: interface news editor: Yang Bin_ NF4368