Event: 1H22 achieved operating income of 1.164 billion yuan (YoY+62.15%), net profit of 242 million yuan (YoY+74.64%) and non-return net profit of 227 million yuan (YoY+68.05%).
From the split point of view, 2Q22 realized income of 649 million yuan (YoY+28.34%), net profit of 141 million yuan (YoY+35.19%) and non-return net profit of 132 million yuan (YoY+31.57%).
Finance: the gross profit margin increases, the R & D investment continues, and the net interest rate improves. The company's 2Q22 set a record high in revenue and net profit, which further consolidated and enhanced the company's market position. In terms of profitability, 2Q22 has a gross profit margin of 39.00%, a month-on-month increase of 1.29%, a month-on-month increase of 2Q22, and a month-on-month increase of 2.27pct. 1H22 invested 152 million yuan in R & D, an increase of 22.41% over the same period last year, mainly invested in high-performance artificial intelligence edge computing chip project, new generation full-HD network camera SoC chip project, vehicle image signal processing and transmission link chipset project, vehicle specification high dynamic image signal processor chip project, high-performance intelligent network camera SoC chip project and other projects. Management expenses of 54.38 million yuan (YoY+75.07%), mainly due to the merger and acquisition of Mou core technology intangible assets evaluation value-added amortization.
Business: smart vision chip leader, professional security, intelligent hardware, automotive electronics blossom. The company is a video-centric industry leading provider of complete chips and solutions, providing customers with high-performance video codec and AI SoC chips, image signal processor ISP chips and complete product solutions as well as professional and technical services. The products are mainly visual chips, including front and rear chip products and solutions in the fields of intelligent security, smart things and smart car dealing. such as image processing chip, network camera chip, video link chip, network video recorder chip, intelligent display chip and vehicle image processing chip, vehicle video link chip, vehicle video recorder chip and so on. Split, 1H22's professional security business achieved income of 780 million yuan (+ 70.38%), corresponding to gross profit margin of 38.20%, down 6.29pct from the same period last year; intelligent hardware business income of 225 million yuan (+ 47.44%), corresponding to gross profit margin of 34.22%, up 1.16pct over the same period last year; automotive electronics business income of 133 million yuan (+ 34.46%), corresponding to gross profit margin of 39.50%, down 5.08pct from the same period last year. In addition, the main subsidiary Mou core technology main SoC chips such as DVR/NVR, 1H22 business income of 103 million, net profit-3.268 million yuan, in 21 years of supply chain tension, Mou core related products can be better guaranteed, sufficient supply to downstream customers, key customer safety inventory has been established, so 1H22 customer pick-up has slowed down. At present, Mou core technology continues to high R & D investment, the launch of new products have been introduced into customers and began mass production.
Outlook: one-stop, front-end collaborative product layout to provide customers with cost-effective visual chips and solutions. In addition to traditional applications, in recent years, the company has expanded its advantages to the field of AIoT and vehicle vision, the company can provide customers with computing power, algorithms, AI product solutions, leading the market in promoting Pratt & Whitney AI; vehicle series image processing and link transmission chips have been imported by multiple head Tier1 parts manufacturers, and the products have been mass produced in a number of vehicle factories, successfully replacing the import scheme.
Profit forecasts and investment advice. As the leading security chip leader in China, after the acquisition of Mou core technology, the company can provide customers with front-end to back-end, full-range, multi-level video processing chip products, while the company's convertible bond project actively layout automotive electronics and AI NVR and AI IPC master chips, newly upgraded new applications open a new round of growth engine. We estimate that the EPS of Fuhanwei from 2022 to 2024 is 2.41,3.30,4.26 yuan respectively. Combined with the valuation of comparable companies, Fuhanwei is given a valuation of 32-40 times PE in 2022, with a reasonable value range of 77.12-96.40 yuan and a rating of "better than the market".
Risk hint. Product research and development is not as expected, related party risk, raw material price fluctuation, international trade friction risk.