Brief comment on performance
The company released its 22-year mid-year report on August 8, with 22H1 revenue of 644 million yuan, down 4% from the same period last year, and net profit of 72 million yuan, down 32% from the same period last year. Among them, 22Q2 revenue decreased by 15% compared with the same period last year, while net profit from home decreased by 30% compared with the same period last year, and increased by 18%.
Business analysis
Affected by the epidemic, Q2 income declined and net interest rate bottomed out and rebounded. The company's second-quarter revenue declined year-on-year and month-on-month, mainly due to the decline in car production and sales due to the epidemic (passenger car sales fell 10% year-on-year / month-on-month decline of 12% in the second quarter). 22H1, the company's gross profit margin was 29.8%, down 5.2pct from the same period last year, mainly due to the increase in costs caused by the continuous rise in raw material prices in the third quarter of last year, and the increase in equipment depreciation and mold amortization before mass production of new projects (22H1 depreciation increased by 20 million yuan year-on-year, an increase of 65%). In addition, 22H1's management expenses increased by 10.5% year-on-year (due to equity incentive provision), and R & D expenses increased by 18% year-on-year (due to the increase in R & D projects). It is worth noting that the gross profit margin and net profit margin of 22Q2 are 30.7% and 13.1% respectively, which are higher than 22Q1 by 1.8pct and 3.4pct respectively. In the second half of the year, with the year-on-year increase in income and the decline in raw material prices, there is still room for repair.
The number of new projects continues to increase. In the first half of 22, the company launched a total of 48 new projects, and the number of new projects increased by 50% compared with the same period last year, of which new energy vehicle projects and smart driving & smart cockpit projects accounted for 31% and 33% of the total. By the end of June 22, the company had a total of 98 projects under research, with an increase of 63% over the same period last year.
The proportion of intelligent electric business of high-quality automobile connector company is increasing rapidly. The company is a high-quality domestic automotive connector company, breaking through the key technologies such as welding-free fisheye terminals and high-current connectors, and the battery management system, hybrid gearbox system, sensors, steering gear and other products under development at the beginning of the year have begun mass production to promote new energy vehicles, new energy vehicles and intelligent driving intelligent cockpit business to further improve the proportion.
Profit adjustment and investment suggestions
We adjust the 2022-2024 homing net profit to 1.9x6x31m, corresponding to EPS 0.47max 0.64x0.76, corresponding to PE being 43-32-27 times, maintaining the "buy" rating.
Risk hint
The risk that the sales volume of new energy vehicles and connector orders are lower than expected; the risk that the progress of the research project is lower than expected; and the risk of shrinking traditional fuel vehicle connector business in a long-term dimension.