In the first half of 2022, the company realized income of 2.118 billion yuan, year-on-year-21.47%, net profit of 368 million yuan, year-on-year-27.51%, and non-return net profit of 201 million yuan,-58.10% year on year. Affected by the sluggish demand for consumer electronics, the company was under pressure at the operating level in the first half of the year. The company has gradually broken through the mid-to-high-end market in the areas of technology and customers, and is expected to return to rapid growth after demand repair and maintain its "buy" rating.
The 2022H1 performance of the company is under pressure as a result of the industry boom. In the first half of 2022, the company realized income of 2.118 billion yuan, year-on-year-21.47%, net profit of 368 million yuan, year-on-year-27.51%, and non-return net profit of 201 million yuan,-58.10% year on year. Company 2022H1 revenue and profits are under pressure, mainly due to household appliances, communications and other consumer electronics market demand continues to be weak, the company's resistance products are facing the pressure of falling volume and price. On the cost side, the company's 2022H1 gross profit margin is 23.70%, year-on-year-9.14pcts, which is also affected by the downturn in the industry. On the expense side, the company's 2022H1 sales / management / R & D / financial expense rates are respectively year-on-year + 0.39/-0.32/-0.11/-2.28pcts.
The company aims at the high-end market and has made a great breakthrough. The company is based on the high-end industry, open up benchmarking customers, from the downstream point of view, communications, automotive electronics industry sales accounted for respectively year-on-year + 3pcts, successfully introduced the new energy automobile industry benchmarking customers full range of vehicle regulation products, and achieved automotive electronics sales + 28.52% year-on-year. In terms of product specifications, the company's sales of high-end products continued to increase compared with the previous month, with sales of high-end MLCC and chip resistors rising from 30.26% in January to 43.43% in June, respectively.
In line with the changing trend of industry demand, the company adjusts the implementation schedule of the Xianghe project and further tilts resources to the high-end market. The company plans to invest 7.5 billion yuan to build Xianghe Industrial Park to expand the production of 45 billion MLCC products per month. It is expected that the project will be completed in June 2022 and all will be available by 2024.
At present, the first phase of the project (5 billion pieces per month) has reached production. Considering the continuous pressure on consumer electronics demand and intensified competition in the middle and low end of the market, the company decided to adjust the overall implementation progress of the Xianghe Industrial Park project, giving priority to the early construction to greatly increase the proportion of products in the high-end market application areas of MLCC, such as high volume, vehicle regulation and industrial control. Due to the relatively long cycle of high-end technology research and development and high-end market certification, the company has extended the construction period of the Xiang he project by 2 years.
The company starts share repurchase, which is planned to be used to motivate employees. According to the company announcement, the repurchase amount is expected to be no less than 150 million yuan and not more than 300 million yuan, and the repurchase price is capped at 26.98 yuan per share. According to this, it is estimated that the corresponding number of repurchased shares is 5.56 million 1.12 million shares, accounting for 0.48% of the total share capital. The share buyback will be used to implement the company's equity incentive plan and / or employee stock ownership plan, which is expected to further improve the medium-and long-term incentive and restraint mechanism of the backbone team.
Risk factors: the recovery of the industry boom is not as expected; the industry competition intensifies.
Profit forecast, valuation and rating: the company continues to promote production expansion projects, smart phones, communications equipment, security industrial control long-term benefit from domestic replacement In the short term, taking into account the pressure on consumer electronics demand, and combined with the company's mid-report data, we downgrade the company's 2022-2023 EPS forecast to 0.73 Forward PE 0.93 yuan (the original forecast is 1.38 Forward PE 2.04 yuan, corresponding to the increase in equity 2.63 yuan), and add a new 2024 EPS forecast of 1.21 yuan, with reference to the company's historical valuation level (the average Forward PE since 2021 is about 35 times), combined with short-term prosperity.