Items:
On August 26, 2022, the company released its half-yearly report for 2022:
1) 2022H1: operating income 620 million yuan, year-on-year-10.67%; gross profit 49.69%, year-on-year-3.27pct; return net profit 191 million yuan, year-on-year-28.70%; deducting non-return net profit 172 million yuan, year-on-year-27.54%. 2) 2022Q2: operating income 315 million yuan, year-on-year-13.77%; gross profit 48.04%, year-on-year-6.08pct; return net profit 99 million yuan, year-on-year-29.38%; deducting non-return net profit 88 million yuan, year-on-year-33.11%.
Comments:
The demand for mobile phones remains in the doldrums, and the increase in the mass production scale of automobile CIS is expected to lead to high performance growth. Total mobile phone shipments in the domestic market totaled 136 million units in the first half of 2022, down 21.7% from the same period last year, according to data from the China Institute of Information and Communication. Dragged down by the mobile phone CIS business, the company's performance was under short-term pressure. 2022Q2 realized operating income of 315 million yuan, year-on-year-13.77%, month-on-month + 3.31%; gross profit 48.04%, year-on-year-6.08pct, month-on-month-3.35pct; and net profit of 99 million yuan,-29.38%, + 7.80%. We believe that the demand for mobile phones is expected to pick up gradually, the AIOT market such as security monitoring digital is expected to remain stable, the demand in emerging fields such as medical care, VR/AR and industrial intelligence is booming, the pace of mass production of the company's automobile CIS is steadily advancing, and the company's performance is expected to return to the track of high growth in the future.
The company's medium-and high-pixel products are gradually introduced into mass production, and the demand in the areas of security and mobile phones is expected to grow steadily. Frost & Sullivan estimates that the number of cameras carried on a single mobile phone will increase from 3.4 in 2019 to 4.9 in 2024, with the new cameras mainly in low and medium pixels. The company's technology has a comparative advantage in the field of low-and medium-pixel product packaging, and the company's future growth space has been opened as wafer-level packaging technology continues to break through the pixel limit. At the same time, the application scenarios of security monitoring are constantly enriching. As the leader of the CIS wafer-level packaging subdivision track, the company is expected to fully benefit from the high growth of the industry.
The company is actively expanding production, layout, automotive CIS and other emerging areas, binding high-quality customers to promote long-term development. The trend of automobile electrification and intelligence promotes the rapid growth of the demand for on-board cameras. Frost & Sullivan predicts that the automotive CMOS image market will grow from US $2.02 billion in 2020 to US $5.33 billion in 2025, and CAGR will be 21.42% in 2020-2025. The company is deeply bound with Howie, Sony Group Corp and other high-quality customers to maintain the industry leadership in automotive CIS mass production, and is expected to benefit from the outbreak of downstream demand in the future. In addition, with the gradual rise of new CIS application fields such as medical treatment, VR/AR and industrial intelligence, the company has accumulated profound technology, and the new application field is expected to become a new growth point of business in the future.
Investment suggestion: as the leader of CIS wafer-level packaging subdivision track, the company has profound technology accumulation and high customer structure, and is expected to continue to benefit from the high growth of automotive CIS demand and the emergence of new CIS application scenarios. Considering the short-term pressure on mobile phone CIS business, out of careful consideration, we lowered the company's homing net profit forecast for 2022-2024 from RMB 6.86 to RMB 532, corresponding to EPS of RMB 0.81 and 1.15, respectively. Taking into account the company's historical PE valuation range and comparable company valuation, it will be given 40 times PE in 2022, with a target price of 32.55 yuan, maintaining a "strong push" rating.
Risk tips: mobile phones, security and other downstream areas are not as prosperous as expected; Sino-US trade frictions cause uncertainty; overseas outbreaks cause uncertainty.