1H22 performance is in line with our expectations
The company announced 1H22 results: 1H22 achieved revenue of 420 million yuan, + 12.5% year-on-year; net profit of 40 million yuan,-10.3%; and deduction of non-net profit of 30 million yuan,-15.0%. Corresponding to 2Q22 income of 200 million yuan, year-on-year-8.0%, month-on-month-5.8%; return-to-mother net profit of 20 million yuan, year-on-year-31.9%, month-on-month-22.3%; deduction of non-net profit of 20 million yuan,-26.1%, month-on-month + 31.6%.
Trend of development
2Q22 performance is under pressure under multiple factors, and the rapid growth of sensor business drives revenue growth. Under the adverse effects of the repeated epidemic, such as poor traffic, labor shortage, rising raw material prices and slow transportation, the company's 2Q22 revenue and performance declined significantly compared with the same period last year; but in the first half of the year, the company's revenue still grew against the trend, reflecting the good operating results of the company's development strategy such as focusing on the "new four modernizations" and the development of new products. From a business point of view, the revenue of 1H22 sensor / fuel system accessories is 1.0 / 220 million yuan, which is + 19.3% and 4.3% compared with the same period last year. Sensor business is the core driving force of the company's revenue growth.
The rise in raw materials depresses the gross profit margin, and the volume of new products is expected to boost profitability. 1H22's gross profit margin is 25.4%, year-on-year-0.5ppt, and net profit is 10.6%. Year-on-year-2.7 ppt; corresponding to 2Q22 gross profit margin of 27.7%, same / month ratio + 1.4/+4.5ppt, net profit rate 9.5%, same / ring ratio-3.4/2.0ppt. The decline in gross profit margin of 1H22 is mainly due to rising prices of raw materials such as precious metal pastes (gold, palladium, platinum). We believe that with the stabilization of raw material prices, the increase in the proportion of sales of new products with high gross margins, and the release of economies of scale brought about by the volume of new products, the gross profit margin is expected to increase. In terms of expenses, 1H22's period expense rate is 12.1%, compared with the same period last year-0.2ppt, mainly benefiting from the exchange gains brought about by the devaluation of the RMB.
The sensor product line is further enriched and the upstream chip layout creates a competitive advantage. In addition to the liquid level sensor and rotation sensor, the key breakthrough pressure sensor has covered three measuring ranges of low pressure, medium pressure and high pressure, which can basically meet the needs of all kinds of fuel vehicles. We believe that the company's technical level can be calibrated with foreign benchmarking enterprises, low-pressure products are expected to benefit from the domestic substitution trend, and medium-and high-pressure products are expected to benefit from the industry expansion brought about by the penetration of heat pump, air / hydraulic suspension, wire-controlled braking and other technologies. The breakthrough of the company's pressure sensor is mainly due to the independent design and closed testing ability of long Micro Technology's MEMS sensor chips. we believe that the company's investment to strengthen technical barriers is expected to enhance the long-term competitive advantage of the industrial chain.
Profit forecast and valuation
Due to the impact of the epidemic and other negative factors, we reduced the price of 22max for 23 years-32.5% to 11600000 yuan. The current share price corresponds to a price-to-earnings ratio of 36.1 times 2023. Maintain the outperform industry rating and lower the target price by 25% to 9 yuan, corresponding to a 23-year price-to-earnings ratio of 42.9 times earnings, which has 21.5% upside compared to the current stock price.
Risk.
Car networking business is not as expected, sensor new business development is not as expected, and raw material prices continue to rise.