Han’s Laser Preliminary Net Profit Higher Than We Expected; Fair Value Estimate Retained at CNY 49

We have maintained our forecasts, and our fair value estimate is unchanged for now after Han’s Laser revealed preliminary 2021 net income of CNY 2 billion at the midpoint, doubling year on year and about CNY 275 million above our expectations. Fourth-quarter net income is CNY 500 million. We originally expected a muted fourth quarter owing to low China PMI figures in September and October and electricity curtailment, but we underestimated the rebound from November onward. The company’s announcement said shipments of printed circuit board, electric vehicle battery, and mini-LED equipment recorded strong year-on-year increases, but we suspect some of these are pulled forward in anticipation of the lunar new year in February 2022.