Events:
The company released its 2022 semi-annual report on August 18. According to the announcement, 2022H1, the company achieved operating income of 2.118 billion yuan, a decrease of 21.47% over the same period last year, and a net profit of 3.68 yuan, a decrease of 27.21% over the same period last year.
Comments:
Demand in the consumer electronics market is weak and incomes are down slightly. 2022H1, the company achieved operating income of 2.118 billion yuan, a decrease of 21.47% over the same period last year. 2022Q2, the company achieved operating income of 1.016 billion yuan, down 33.29% from the same period last year, down 7.80% from the previous month. The decline in income is mainly due to the superposition of factors such as repeated epidemic situation, downturn in real estate, structural lack of core, geopolitics and so on. Although the market demand in high-end applications represented by 5G applications, new energy vehicles and photovoltaic is stable, the demand in the consumer electronics market such as home appliances and communications continues to be weak, and the company continues to optimize its product structure, but it is still affected by the weak overall demand, showing a drop in volume and price.
Gross profit margin has declined, and non-recurring gains and losses affect the profit side. 2022H1, the company's gross profit margin was 23.70%, down 9.14pct from the same period last year, mainly due to the decline in volume and price caused by the decline in market demand. On the expense side, 2022H1, the expense rate for the period of the company is 9.99%, which is lower than the same period last year. Among them, the sales / management / R & D / financial expense rates are 1.70, 6.16, 4.73 and 2.59%, respectively, and + 0.39, 0.31 and 0.10, respectively, compared with the same period last year. The decrease in the financial expense rate is mainly due to the collection of funds and the corresponding increase in interest income over the same period last year. 2022H1, non-recurrent profit and loss reached 167 million yuan, which is mainly affected by the revenue from the acquisition and storage of government land and ancillary buildings, government subsidies and so on.
Product structure continues to improve, short-term fluctuations do not change the domestic substitution logic. During the reporting period, the company's sales of high-end products continued to increase month-on-month, with the proportion of high-end MLCC and chip resistors rising from 30.26% and 28.37% in January to 40.80% and 43.43% in June, respectively. At the same time, the company successfully introduced a full range of automotive regulation products from benchmark customers in the new energy automobile industry, and automotive electronics sales increased by 28.52% compared with the same period last year, with the rapid growth against the trend. With the continuous deepening of the company's layout in the automotive electronics field, product technology research and development has made continuous breakthroughs. In the medium to long term, automotive electronics will become the main bright spot of the company. At present, the company's market share in MLCC is only in single digits. With the continuous release of production capacity of the company's high-end capacitor base project in Xianghe Industrial Park, it is expected to benefit from the localization process of MLCC.
Profit forecast and valuation: considering that the epidemic repeatedly leads to weak consumer demand, we lower the profit forecast and target price. It is estimated that the company's 2022 PE 2023 EPS will be 1.17 yuan in 2024, and the current share price will be 15.46 times the corresponding PE. Give the company 35 times PE in 22 years, corresponding to the target price of 21.40 yuan.
Risk hint: downstream prosperity is not as expected, and production expansion progress is not as expected.