Main points of investment
Event: Chunzhong Science and Technology issued a semi-annual report announcement in July 2022, which pointed out that the company's operating income in the first half of 2022 was 170 million yuan, down 17.19% from the same period last year, and its net profit was 19 million yuan, down 32.46% from the same period last year.
The decline narrowed in the first half of the year, and Q2 performance improved significantly: in the first half of 2022, under the influence of outbreaks in many places across the country, newly signed sales orders declined compared with the same period last year, and the company's homed net profit decreased by 32.46% compared with the same period last year. However, it has narrowed the decline in revenue and net profit reported in mid-2022. According to the performance of Q2, the operating income was 104 million yuan, 13.42% lower than that of Q2 in 2021, and the net profit was 27 million yuan, an increase of 71.09% over Q2 in 2021, a gross profit margin of 56.09%, an increase of 3.96pp over Q1 gross profit margin of 52.23% in 2022, and a net sales profit rate of 25.99%, which was much better than that of Q1 in 2022. From the expense point of view, in the first half of 2022, the sales expenses decreased by 10.96% compared with the same period last year, the management expenses decreased by 12.22%, and the financial expenses decreased by 17.31%.
Card position core chip link, expand the company's product line: self-research chip project is progressing steadily, the company will continue to increase investment in independent controllable audio and video processing chips, and strive to improve the competitive advantage of domestic audio and video control products to better meet the diversified product needs of customers. With the arrival of policies such as "14th five-year Plan", "New Infrastructure", "5G" and Ultra HD Video Planning, "hundred cities and thousands of screens", as well as the vigorous development of emerging industries such as VR/AR and new energy vehicle display, the demand in the field of professional audio and video display and control continues to grow. We believe that with the continuous enrichment of product categories, the steady progress of self-research chip projects and the further improvement of sales channels, Chunzhong science and technology will continue to make steady progress.
Profit forecast and investment rating: we continue to be optimistic about the steady development of the video leader, so we maintain the performance forecast for 2022-2024. the estimated net profit is 123 million yuan, 152 million yuan and 191 million yuan respectively, the corresponding eps is 0.66,0.81 yuan and 1.02 yuan respectively, and the corresponding PE valuation is 19x/15x/12x, respectively. We continue to be optimistic about the company's future performance steadily upward. Therefore, the "buy" rating is maintained.
Risk hint: downstream customer order demand is lower than expected risk; the company's technology update is not as expected as expected risk; after the company's scale expansion, operation and management is not as expected as expected risk.