2021 homing net profit in line with performance forecast

The company announced its 2021 results: revenue was 3.884 billion yuan, up 33.7% from the same period last year; net profit from home was 199 million yuan, down 57.5% from the same period last year, which was at the upper limit of the previous performance forecast of 1.59-206 million yuan; non-net profit was deducted from 94.64 million yuan, an increase of 41.9% over the same period last year. The corresponding 4Q21 income was 1.151 billion yuan, an increase of 37.3% over the same period last year, and the net profit was 94.81 million yuan, an increase of 184.5% over the same period last year. At the same time, the company announced that it intends to pay a cash dividend of 0.2 yuan per share (including tax) in 2021.

At the same time, the company announced 1Q22 performance forecast: the estimated return net profit is 75 million to 100 million yuan, an increase of 1567.1 percent to 2122.8 percent over the same period last year; deducting non-net profit of 7000 to 95 million yuan, an increase of 4279.1 percent to 5771.6 percent on last year. The company said that the increase in net profit was mainly due to the continued increase in 1Q22's orders in multi-business areas and the rising share of new energy vehicles.

Trend of development

The growth of automotive products is strong, and the performance of consumer electronic components is outstanding. In 2021, the company's consumer electronics and automotive products have achieved eye-catching growth, among which: 1) Intelligent terminal functions and precision structural components and modules: revenue increased by 39.8% to 2.351 billion yuan, and sales increased by 8.5% over the same period last year. We judge that it is mainly due to the two-way increase of the company's customer share and value of consumer electronics in North America, while the synergy of die-cutting and metal gradually appears. Orders for consumer electronics are growing. 2) New energy vehicle products: revenue increased by 90.1% to 900 million yuan compared with the same period last year, accounting for 23.2% of total revenue. We believe that this is mainly due to the continued increase in customer shipments of new energy vehicles in North America. In terms of gross profit margin, the gross profit margin of consumer electronics products is stable as a whole, and the gross profit margin of new energy vehicle products has increased to 32.6% year on year, showing a good momentum of development.

1Q22 performance is bright, optimistic about the high growth of new energy vehicles + mobile phone products throughout the year. The company said that thanks to the continued development of consumer electronics and new energy vehicles, 1Q22 revenue has grown steadily, leading to a significant improvement in profits. We expect smartphone revenue to rise steadily, new energy vehicle revenue to grow rapidly, and revenue share to increase. Considering the good gross profit level of the automobile business, we expect the overall gross profit margin of 1Q22 to improve year-on-year. Looking forward to 2022, we are optimistic about the rapid growth of the company's energy vehicle business with the increase in customer shipments of new energy vehicles in North America and the company's capacity expansion; at the same time, the smartphone business is expected to steadily increase on the basis of the company's share of North American consumer electronics customers and the increase in ASP.

Profit forecast and valuation

Taking into account the rapid growth of the new energy vehicle business, we raised the 2022 Universe net profit forecast for 2023 by 6.5% to 370 million yuan / 456 million yuan. The current share price corresponds to a price-to-earnings ratio of 24.5 times earnings for 2022 Universe in 2023. Maintain an outperform industry rating and a target price of 18.0 yuan, corresponding to a price-to-earnings ratio of 33.3 to 26.9 times 2022 to 2023, with 35.7% upside compared to the current stock price.

Risk.

Shipments of mobile phones from consumer electronics customers in North America fell short of expectations; shipments of new energy vehicles in North America fell short of expectations; and Weibo Precision continued to lose money.