Event: according to the company's semi-annual report for 2022, 2022H1's revenue was 716 million yuan, down 11.6% from the same period last year; the net profit was 30.4809 million yuan, down 31.26% from the same period last year; and 24.064 million yuan was deducted from non-parent net profit, down 40.25% from the same period last year. From a quarterly point of view, the company's 2022 Q2 revenue was 441 million yuan, down 5.22% from the same period last year, up 60.71% from the same period last year; the net profit from home was 43.8651 million yuan, up 51.37% from the same period last year, turning losses into profits; and deducting 385.671 billion yuan from non-return net profit, an increase of 45.19% over the same period last year.

Overcome the epidemic disturbance inflection point, automotive electronics & a new type of display business performance is eye-catching. 2022H1 achieved revenue of 716 million yuan, down 11.60% from the same period last year, and realized net profit of 30.4809 million yuan, down 31.26% from the same period last year. However, with the stabilization of the epidemic, the company gradually got rid of the effects of the epidemic, and its profitability improved significantly. Company Q2 achieved revenue of 441 million yuan, an increase of 60.71% over the previous month, and realized net profit of 43.8651 million yuan, an increase of 51.37% over the same period last year. In terms of expenses, the company's sales expense rate, management expense rate, R & D expense rate and financial expense rate are 1.54% 7.26% 10.34% 0.14% respectively, and the overall cost control is good. In terms of business, the revenue of the company's 2022H1 security business was 488 million, down 13.19% from the same period last year, while revenue from non-security business was 209 million, down 11.58% from the same period last year, mainly due to the decline in business revenue from consumer electronics products such as video and mobile phone-related products. But there has been a big increase in revenue in new displays and smart driving. Among them, revenue from laser projection products increased by 289.68% compared with the same period last year. Revenue from ARPUP VR products increased by 93.38% year-on-year, with sales exceeding 40,000 units; revenue from smart driving products increased by 79.05% over the same period last year.

Continue to promote the layout of new business, is expected to open a new round of growth space: the company actively layout automotive electronics & new display new business, 2022H1 its laser projection products, AR/VR products, intelligent driving products are 289.68% / 93.38% / 79.05% respectively, the growth rate is eye-catching. In addition, the company has also made a major breakthrough in new business development, the company millimeter wave radar and related products, AR-HUD-related products, in-car projection products have been designated by new energy vehicle manufacturers. In the new display field, the company currently has the industry cutting-edge optical waveguide, Fresnel lens and other core technology solutions, in AR/VR products have parts and machine assembly integration capability, and has the domestic well-known AR/VR enterprises happy, small, bright vision, Nader and other high-quality customer resources. In the field of intelligent driving, the company also has panoramic camera lenses, thermal imaging lenses, cabin inspection lenses, forward-looking lenses and angle radar, vehicle-road coordination radar, in-car vital signs detection radar and other products. With the development of the trend of automobile intelligence and the promotion of the new display to the consumer market, the automotive electronics & new display market will continue to maintain a high boom. In the future, with the rapid penetration of the company's automotive electronics & new display business in the new market, the company's performance is expected to usher in a new round of explosion with the development of the industry.

Raise funds to strengthen the layout, and release production capacity to boost high growth. The company will issue no more than 475 million yuan of shares to specific objects in 2020, focusing on the intelligent manufacturing project of new display and smart wearable products, which will be used to expand the production capacity of vehicle lens, intelligent projection and AR/VR. Upon completion, the company will achieve an annual production capacity of 18 million sets of car lens products, 2 million sets of new projection lens products and 580000 sets of VR/AR all-in-one machines. It will greatly increase the production capacity of vehicle lens products and new projection lens products, and optimize the company's product structure. The implementation of the fund-raising project will help to enhance the company's competitiveness and profitability, consolidate the company's competitive advantage in the industry, and accelerate the release of the company's performance, so as to achieve the goal of high-quality and stable development.

Maintain the "buy" rating: we are optimistic about the company's leading position in security zoom. The company grows steadily in the field of security lens, and accelerates the layout to expand new types of display, intelligent driving and other emerging tracks. Automotive electronics & new display field performance is released rapidly, and the business growth potential is huge. With the relief of the epidemic and economic recovery and the gradual release of investment project capacity, the company will enter a new round of rapid growth, and its performance is expected to achieve high growth. It is estimated that the return net profit of the company from 2022 to 2024 is 1.02 yuan 1.86 / 347 million yuan respectively, and the EPS is 0.38 prime 0.70 yuan 1.30 yuan respectively, corresponding to 46X, 25x and 14x PE in 22-23-24.

Risk hint: market demand is lower than expected, market competition aggravates risk, intelligent driving penetration is lower than expected, and customer concentration is high.