In the first half of 2022, the company realized income of 1.164 billion yuan, year-on-year + 62.15%, net profit of 242 million yuan, year-on-year + 74.64%, non-return net profit of 227 million yuan, + 68.05%. In the context of pressure on industry demand, the company benefited from large client procurement demand, and its performance in the first half of the year maintained a trend of counter-trend growth, followed by a follow-up focus on the company's new product volume and automotive product progress, and maintained a "buy" rating.
The demand of H1 downstream is under pressure, and the company has achieved good growth against the trend. In the first half of 2022, the company realized income of 1.164 billion yuan, year-on-year + 62.15%, net profit of 242 million yuan, year-on-year + 74.64%, non-return net profit of 227 million yuan, + 68.05%. In a single quarter, the company's 2022Q2 realized revenue of 649 million yuan, year-on-year + 28.34%, net profit of 141 million yuan, year-on-year + 35.19%, deduction of non-return net profit of 132 million yuan, + 31.57%. On the cost side, the company's Q2 gross profit margin is 39.0%, year-on-year-5.86pcts, month-on-month + 1.29pcts; on the expense side, the company Q2 sales / management / R & D / financial expense rates are respectively year-on-year-0.25/-0.43/-2.86/-0.84pct.
Benefiting from the procurement needs of major customers, the company's H1 professional security products maintain a substantial growth trend. In terms of business, the company's professional security product income in the first half of the year was 780 million yuan, year-on-year + 70.38%, gross profit margin-6.29pcts to 38.20%; intelligent hardware product income 225 million yuan, year-on-year + 47.44%, gross profit margin + 1.16pcts to 34.22%; automotive electronics revenue 133 million yuan, year-on-year + 39.50%, gross profit margin-5.08pcts to 39.50%. Looking forward to the second half of the year, with the gradual landing of new IPC SoC and NVR SoC products, the company is expected to maintain a growth trend that is better than that of the industry.
Speed up the layout of vehicle business, is expected to create the next important growth point. Since 2018, the company has focused on developing the field of automotive electronics, and the on-board ISP chip has successfully passed the vehicle specification certification. At present, it is gradually cutting into the pre-loading market from rear loading, and has begun to supply bulk products for mainstream automobile companies. The company also actively promotes the development of 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, the value of single car continues to increase, we are optimistic that the car business will become the next important growth point of the company.
Risk factors: high customer concentration, intensified market competition, downstream demand slowdown and other risks.
Earnings forecast, valuation and rating: considering that the share of the company's security chip in the client increases smoothly, we raise the company's 2022-23 EPS forecast to 2.25max 2.86 yuan (the original forecast is 2.20pm 2.77 yuan, corresponding to the corresponding equity increase before 4.20pm 5.28 yuan), and add the 2024 EPS forecast to 3.66 yuan. Consider 21Q2 eye core and watch, refer to the dynamic PE level of the past year (about 40 times), and combined with the current industry prosperity, give the company 2022 PE=38 times, corresponding to the target price of 86 yuan, to maintain the "buy" rating.