Steady growth in revenue, changes in product structure and the decline in ASP in the optical division are a drag on the company's profitability. The company's 2Q22 revenue was 4.52 billion yuan, up 4.6% from the same period last year, mainly due to the increase in revenue from precision structures and optics. In the second quarter, the company's acoustics / electromagnetic transmission and precision structures / optics / sensors and semiconductors division's revenue was 19.1%, 14.3%, 92.4 million yuan, respectively, with a year-on-year growth rate of-6.4%, 17.4%, 14.9%, 1.3%, respectively, accounting for 42.3%, 31.7%, 20.6%, 5.3% of revenue. Due to the diversification of the product structure and the intensification of competition in the optical industry, the ASP declined, 2Q22 recorded a gross profit of 830 million yuan, a gross profit margin of 18.3%, a year-on-year drop of 6.7pct and a month-on-month drop of 1.3 pct. The net profit of the company was 145 million yuan, down 62.8% from the same period last year, and the net profit margin of the company was 3.2%.
Acoustics: the weak mobile phone market has led to a retrogression of income, and car acoustics has gained multiple fixed points. Revenue from 2Q22, the company's acoustics division, fell 6.4% year-on-year to 1.91 billion yuan, mainly due to the downturn in the downstream Android phone market and the impact of customer orders. Gross profit recorded 530 million, gross profit margin 27.7%, month-on-month increase in 1.1pct, the second half of the year may be negatively affected by Android acoustics, reduced capacity utilization and other factors. The company has developed well in the field of vehicle acoustics, and has obtained a number of designated projects, including overall solutions, local speakers and tuning projects, and customers including traditional car companies, new forces and overseas mid-and high-end car brands. the types of projects and customers covered are comprehensive and rich.
At the end of July, Nezha S, which carries the company's on-board acoustic solution, has been officially released. With the upgrading of automobile acoustics and domestic substitution, the company expects to get more designated projects in the second half of the year.
Electromagnetic transmission and precision structural components: Android motor, Dongyang precision pull branch income growth, good growth. Sales of the 2Q22 division recorded 1.43 billion yuan, up 17.4% from the same period last year, mainly due to: 1) despite the weak Android market, the company's Android motor shipments continued to grow, up 49.4% from the previous month. 2) Dongyang precision revenue contribution and customer expansion led to a 40.2% year-on-year increase in precision structure revenue. Segment gross profit margin is 21.2%, lower 0.9pct than the same period last year, month-on-month increased 1.6pct, in which precision structure business gross profit margin increased 5.2pct compared with the same period last year. 2Q22, the company's RichTap cross-platform tactile solution is not only fully recognized by mobile phone customers, but also successfully promoted to the game console, AR/VR and automotive markets. At present, the tactile solution has been successfully introduced into the global head VR product supply chain. Looking forward to the second half of the year, with the advent of the peak sales season for overseas customers, the company's motor and structure business is expected to grow rapidly through Dongyang Precision to further cut into the precision structural components of overseas customers.
Optics: fierce competition in the industry has led to a decline in ASP and steady progress in spin-off and listing. The 2Q22 revenue of the optical division was 930 million yuan, an increase of 14.9% over the same period last year and 0.5% from the previous year, mainly due to the increase in shipments of optical lenses and modules, of which optical module shipments increased significantly by 116.6% compared with the same period last year. Affected by fierce competition in the industry and weak demand for mobile phones, lens ASP dropped, segment gross profit recorded-40 million yuan, gross profit margin was-4.7%, month-on-month decline 8.2pct. In terms of new products, at present, the company's VCM products have begun small batch verification shipments, 1G5P and 1G6P WLG products continue to ship, 1G5P lenses are used by Hongmi K50 supreme edition, and WLG glass lenses are expected to be promoted and applied in vehicle, AR/VR equipment, semiconductor production and testing and other industrial fields in the future. In terms of capital operation, the subsidiary Chengrui Optical Application Co., Ltd. is listed on the board, and plans to raise as much as 8.21 billion yuan. At present, the spin-off listing is in steady progress.
Investment advice: in view of the weak demand in the mobile phone market and fierce competition in the optical industry, we have lowered the company's profit forecast. It is estimated that the company's revenue from 2022 to 2024 will be RMB 190.9x216.2 billion RMB, an increase of 8.0% over the same period last year. 13.3% and 8.2% The net profit of homing was 7.2gam9.9 pesque 1.24 billion yuan respectively, with a year-on-year growth rate of-45.2 percent, 36.5 percent, 25.9 percent. At present, vehicle acoustics has achieved a number of fixed points and has great potential to generate revenue in the future. We believe that the company still has room for valuation improvement by giving the company a target price of HK $17, corresponding to 18 times 2023 PE, maintaining a "buy" rating.
Risk Tip: the risk of lens prices returning to less than expected, the risk of a continued downturn in the mobile phone market, and the risk that new product research and development is not as expected.