2022Q3 performance continues to improve and the business expansion period continues. 2022Q3 realized operating income of 431 million yuan, yoy+27.66%, return net profit of 128 million yuan, yoy+39.95%, deducted non-return net profit of 122 million yuan, yoy+42.87%. The gross profit of 22Q3 is 47.09% yoyweights 1.76pct, the net profit is 31.30% yoyweights 1.48pct, the net profit is 5.53pct. The performance grew steadily in the third quarter, and the profitability improved year-on-year and month-on-month. The 2022Q3 sales / management / R & D / financial expense rate is 3.45% / 4.46% / 4.12% /-2.07% respectively. Yoymilk 1.50pct / + 1.03pct /-0.06pct /-1.34pct. Affected by the expansion of the scale of sales, personnel investment increased, staff compensation and other expenses increased, resulting in an increase in sales management costs.
Successful introduction of industry-leading customers, excellent profit quality, long-term benefit from customer expansion + capacity expansion:
Functional devices have the characteristics of strong customization, fast product update, significant scale advantage and strong customer stickiness. There are many participants at home and abroad, and the competition is fierce. The company's products were successfully introduced into the global contract manufacturing leader Foxconn, and its sales revenue to Foxconn showed an overall growth trend. From 2017 to 2021, the company's sales revenue to Foxconn was 28.2%, and its contribution to the company's revenue was 76% / 84% / 54% / 61% / 69% respectively. Relying on high-quality customers to open brand influence, product power + brand power to support the company's customer progress has achieved remarkable results, the new Ofeiguang, Qiu titanium technology, Flextronics and other customers, the business scale continues to grow. The company's IPO project further expand the company's production capacity and improve product quality. Capacity release supply capacity to enhance superimposed customer expansion, the company's long-term performance growth flexibility.
The deepening of the degree of automotive electronization further enhances the demand for functional devices, automotive electronics (new energy vehicles, new energy batteries) technology reserves are available, automotive electronics business is expected to benefit from automotive electrification, intelligent transformation to open the second growth curve. The electric transformation of the automobile, the improvement of ADAS and the permeability of the intelligent cockpit lead to the deepening of the electronic degree of the automobile and the increase of the bicycle value of functional devices. The penetration rate of 2022H1 new energy vehicles is 12%, which is 1.8pct higher than that of the whole of 2021, and the rapid growth momentum continues. Policy guidance + the launch of new models will continue to accelerate the electrification transformation of good vehicles. Consumption upgrade superimposed cost down, ADAS and smart cockpit permeability to improve the space. Automotive electronics accounts for an increasing share of vehicle manufacturing costs, which is expected to be close to 50% in 2030, further driving the increase in the value of bicycle functional devices.
Investment suggestion: the company's annual revenue in 22-23-24 is 14.21 / 18.44 / 2.394 billion yuan, and the net profit is 3.47 / 4.47 / 572 million yuan, maintaining the "buy" rating.
Risk tips: downstream demand is lower than expected, customer expansion is not as expected, capacity release is not as expected, market competition intensifies the loss of company share, resulting in a decline in profitability.
