Key elements of the report

In 2022, Q1 realized operating income of 1.717 billion yuan (YoY+10.50%), net profit of 181 million yuan (YoY-21.66%) and non-return net profit of 172 million yuan (YoY-21.03%).

Main points of investment:

Under short-term pressure on net profit, the consumer electronics business is expected to recover: in 2021, the company achieved revenue of 7.018 billion yuan, an increase of 2.55% over the same period last year, and a net profit of 904 million yuan, an increase of 8.39% over the same period last year. The company's 21-year revenue growth is mainly due to the housing economy caused by the epidemic, which has increased the sales of the company's consumer electronics products, and the strong demand for new energy vehicles downstream has led to the rapid growth of the company's automotive electronics business. The increase in homing net profit is mainly due to the expansion of the scale and the increase in the return on investment in the subsidiary Bic Power. Q1 Yangtze River Delta, Pearl River Delta epidemic in 22 years led to underemployment downstream, the company's consumer electronics business orders decreased, but thanks to high growth, high gross margin of automotive electronics business, revenue still achieved growth in the first quarter. However, affected by the epidemic, Dongguan Depter, a holding subsidiary with consumer electronics as its main business, suffered a loss in the first quarter, with rising raw material costs and a year-on-year decline in net profit. We expect that with the relief of the epidemic, the recovery of consumer electronics demand, superimposed new energy vehicles, UTG and other businesses continue to expand, the company can grow in 22 years.

The thinning business is developing rapidly, and the volume of automotive electronics business can be expected: the company has obvious technical advantages in thinning business, and it is the only supplier certified by Apple Inc in China, and its revenue scale and profitability rank first in the industry. Downstream customers include Sharp, LG Display, BOE and other domestic and foreign panel giants, the company's current thinning-based UTG business already has mass production capacity, the first phase capacity 300k/ month, and with Chongqing Yongxin and thinning Phase 6 expansion project completed, production capacity is expected to further increase. At the same time, benefiting from the increased demand brought about by the transfer of LCD panels to China, it is also good for the company's screen thinning business to achieve sustained growth. In terms of automotive electronics, the company's automotive electronics business accounts for more than 33% of revenue, a high level of gross profit margin, a full range of products, obvious technical advantages, and covers core modules with high technical difficulties, such as central control screen and vehicle screen. At present, it has become an important supplier to domestic and foreign automobile giants such as BYD and Tesla, Inc., and has entered more than 70% of the global automobile brand industry chain. The company benefits from the increase in the number of displays and unit prices brought about by car electrification and cockpit intelligence, which is expected to lead to a rise in the volume and price of related business.

Profit forecast and investment advice: it is estimated that the operating income from 2022 to 2024 will be 80.71 pound 95.24pm 11.334 billion yuan, and the net profit of return to the mother will be 9.82 billion pound 1.495 billion yuan respectively. Corresponding to the closing price on May 5, EPS is 0.40 pound 0.49max 0.58 yuan, corresponding to PE 15.18X/12.47X/10.41X, maintaining the "over-holding" rating.