Brief comment on performance
On October 25, the company released its third quarterly report for 2022. 1) the revenue in the first three quarters was 668 million yuan, up 15.23% from the same period last year; the net profit was 53 million yuan, down 43.15% from the same period last year; and the non-return net profit was 33 million yuan, down 63.20% from the same period last year. 2) for Q3 alone, the revenue was 266 million yuan, up 19.48% over the same period last year; the net profit returned to the mother was 12 million yuan, down 64.82% from the same period last year; and the non-return net profit was 2 million yuan, down 93.76% from the same period last year.
Business analysis
Weak consumer electronics terminal demand affects TWS headset business, while rising prices of 1H22 raw material lithium cobalt affect profitability. In the first three quarters, the performance of revenue-side companies increased by 15% compared with the same period last year, and the lower-than-expected growth rate was mainly due to weak end-customer demand and the gradual release of new business, and there was a certain revenue recognition cycle. In the first three quarters, the gross profit margin was 22.15%, down 14.40 pct from the same period last year, and the net profit rate was 8.00%, which decreased 8.22pct from the same period last year. The decline in profitability is mainly due to the increase in the price of 1H22 lithium cobalt, and the company's price transmission cycle bears the main cost pressure in about one year.
Technical barriers to consolidate the leading position, AR/VR, game consoles, e-cigarettes are expected to release. In the weak consumer environment, the company relies on its unique patented laminated button battery technology, in line with the iterative trend of the downstream consumer electronics market, strengthens the advantages of laminated technology, and develops in a direction that meets the product demand, such as high requirements and high unit value. VR/AR end downstream customer demand release, it is expected that the company Q4 to next year is expected to be large-scale shipments, become a new driving force for the company's performance. In addition, with the continuous expansion of the product application market, the company is optimistic about the growth space in the fields of smart bracelets, game consoles, e-cigarettes, drones and so on.
Profit Forecast & Investment suggestion
Taking into account the weak demand for consumer electronics and the rising prices of a number of raw materials, the company's net profit from 2022 to 2024 is expected to be 0.85,1.29 and 193 million yuan, which is-16%, + 52% and + 50% compared with the same period last year, corresponding to a PE valuation of 48,32 and 21 times.
Risk hint
The risk of leakage of core technology, the risk of rising prices of raw materials, the risk of technology iteration falling behind demand, the risk of concentration in downstream application fields, the risk of patent infringement, the risk of lifting the ban on restricted shares, and so on.