Brief performance review
The company released its three-quarter report on October 25. The revenue for the first three quarters was 1.02 billion yuan, an increase of 1% over the previous year, and the net profit of the mother was 120 million yuan, a decrease of 21% over the previous year. Among them, in the third quarter, revenue was 380 million yuan, up 11% year on year and 26% month on month; Guimu's net profit was 49 million yuan, up 2% year on year and 24% month on month.
Management analysis
Dragged down by consumer electronics, revenue increased 11% in the third quarter: in the first three quarters, domestic passenger car wholesale sales increased 14% year on year. Among them, wholesale sales in the third quarter increased 37% year on year and 38% month on month. The company's revenue in the third quarter increased 11% year-on-year, lower than the industry's growth rate, and was mainly dragged down by the consumer electronics sector (the company's automotive electronics and consumer electronics revenue accounted for about 75% and 25%).
Gross margin declined sequentially in the third quarter, and net interest rates were relatively stable. The gross margin for the third quarter was 29.1%, a year-on-year decrease of 3.3 pct and a decrease of 1.6 pct from the previous quarter, mainly due to higher prices of raw materials and increased depreciation, as well as changes in revenue structure (consumer electronics gross margin in the first half of 2022 was 9pct higher than automotive electronics). The net interest rate for the third quarter was 12.9%, down only 0.2 pct from month to month. This was mainly due to the R&D expenses rate falling 1.9 pct month-on-month (revenue growth in the third quarter brought about a scale effect) and lower income tax in the third quarter. The company's project construction progressed steadily, with 250 million yuan under construction at the end of the third quarter, an increase of 100 million yuan and 50 billion yuan respectively over the beginning and middle of the year.
The share of high-quality automotive connector companies in the smart electric business is rapidly increasing. The company is a high-quality automotive connector company in China, breaking through key technologies such as solder-free fisheye terminals and high-current connectors. Mass production of battery management systems, hybrid transmission systems, sensors, steering gears and other products under development at the beginning of the year has already begun, driving a further increase in the share of new energy vehicles and smart cockpits for intelligent driving.
Profit forecasts and investment advice
We adjusted the net profit attributable to the mother for 2022-2024 to 1.9/26/301 million yuan. The corresponding EPS was 0.47/0.64/0.76 yuan respectively, and the corresponding PE was 33/25/21 times respectively, maintaining the “buy” rating.
Risk warning
Risk of new energy vehicle sales and connector orders falling short of expectations; risk that the progress of ongoing research projects falls short of expectations; risk of contraction in the traditional fuel vehicle connector business in the long term