The company released its mid-2021 report.
Core point of view
Q2 showed a significant improvement trend: the company's 21H1 revenue was 1.19 billion yuan, up 4.7% from the same period last year, and the net profit was 110 million yuan, down 39% from the same period last year, deducting 68.6 million yuan from the same period last year, down 56% from the same period last year. Among them, Q2 has a revenue of 680 million yuan per quarter, an increase of 31% compared with the previous quarter, a net profit of 84.84 million yuan, an increase of 278%, a deduction of 62.67 million yuan and an increase of 957% over the previous month. The structure of customers on the demand side is optimized and new products such as wearable and automotive electronics are vigorously expanded. The new production capacity on the supply side has been opened and continues to climb, which has shown a clear trend of improvement.
In the second half of the year, it is expected to return to the positive growth track: 1) the attention and share of the New Glory market continues to increase, XIAOMI's sales remain strong, and the company's current orders fall short of demand; 2) as employees continue to expand and production capacity continues to break through in the second half of the year, we believe that Q3 production is expected to be close to the historical peak, promoting the company's performance to return to positive growth, and profitability is also expected to recover quickly.
Flow value and core competitiveness ensure long-term growth: 1) Fine production management, first-class quality control, dedicated strategy and rapid response ability build the company's core competitive advantage, giving full play to the value of flow and resources among customers. while maintaining the stickiness of important customers, we will continue to expand new products, new areas and new markets. 2) on the demand side, the rapid penetration of 5G mobile phones and the healthy customer structure have led to a steady increase in main business orders. at the same time, we have made great efforts to lay out automotive electronics, smart wear and other businesses, and have obtained the qualification of Valeo global suppliers. In the future, it will have greater order potential under the trend of 5G, automotive electronics, Internet of things and so on. 3) on the supply side, the capacity of the domestic intelligent production base is expanding rapidly, and the opening of the third phase of the project ensures room for capacity improvement in the next three years. at the same time, the layout and successive opening of overseas factories such as India, Vietnam and Bangladesh have also laid the foundation for global cooperation and long-term growth.
Financial Forecast and Investment suggestion
We forecast that the company will earn 0.55 yuan, 0.75 yuan and 1.02 yuan per share for 21-23 years respectively (the original forecast for 21-22 years is 0.69 yuan and 1.00 yuan respectively). Due to the adjustment of customer structure and the original major customer orders affected by international relations, mainly reduced consumer electronics income and gross profit margin, raised automotive electronics income and gross profit margin, and added smart wear business forecast) According to the comparable company gives the company a 21-year valuation of 31 times PE, the corresponding target price is 17.05 yuan, maintaining the buy rating.
Risk hint
Sales of major customers fell short of expectations; risks of changes in the international environment; and progress in overseas production capacity fell short of expectations.