Event comment
Event: the company released its three-quarter report in 2022, with operating income of 2.078 billion yuan in the first three quarters, an increase of 11.54% over the same period last year, and net profit of-59 million yuan, down 41.32% from the same period last year. Of this total, Q3 achieved an operating income of 710 million yuan in a single quarter, an increase of 6.71% over the same period last year, and its net profit was-24 million yuan, down 272.02% from the same period last year.
Revenue growth is solid, and share-based fees are a drag on profits. On the revenue side, the company achieved revenue of 2.078 billion yuan in the first three quarters of 2022, 710 million yuan in the first quarter compared with the same period last year, and 4.83% in the same quarter as the same period last year. We judge that the progress of the project repeatedly affected by the epidemic in many places in the country in the second quarter was reflected in the third quarter. On the profit side, the company made a net profit of-60 million yuan in the first three quarters of 2022, compared with-41.32% of the same period last year. Q3 realized a net profit of-24 million yuan in the first quarter, and 48.89% in the same quarter compared with the previous quarter. The performance loss in the first three quarters was mainly affected by the fees paid by shares. After deducting 90 million yuan of equity incentive amortization expenses, the profit became positive, and the net profit was 30 million yuan.
The company continues to increase investment in research and development to build core competitiveness. The company's sales expense rate, management expense rate and R & D expense rate in the first three quarters were 6.31%, 13.45% and 47.62% respectively, increasing 1.03pct, 1.13pct and 1.02pct respectively over the same period last year. Among them, the sales expenses were 131 million yuan, + 33.35% compared with the same period last year, mainly due to the increase in personnel-related expenses; the management expenses were mainly affected by the increase in equity incentive costs compared with the same period last year. The R & D cost is 989 million yuan, + 13.98% compared with the same period last year. The company continues to increase R & D investment, and the proportion of R & D in revenue has been maintained at about 50% for a long time, of which Q3 R & D expenditure in a single quarter is 365 million yuan, compared with + 22.25% and 15.8% of revenue. 51.41% of revenue.
Cash flow has improved significantly, and inventory and advance payments indicate that there are sufficient orders on hand. At the end of the third quarter, the company's operating net cash flow was 56 million yuan, compared with-155 million yuan in the same period last year, a significant improvement over the same period last year, mainly due to the increase in sales rebates. At the end of the third quarter, the company's inventory was 624 million yuan, an increase of 69.46% over the beginning of the year and 36.54% over the end of the second quarter, mainly due to the current contract performance cost and the increase of chips in products. At the end of the third quarter, the company paid 177 million yuan in advance, an increase of 103.28% over the beginning of the year and 27.33% over the end of the second quarter, mainly due to the company's increase in stock of some materials by means of advance payment. The company's inventory and prepayments have increased significantly, reflecting the abundance of orders on hand, which are expected to gradually translate into revenue from the fourth quarter to next year.
Smart core, smart driving business continues to develop, buyback shows confidence. In terms of smart core, the cockpit SoC and gauge-grade MCU continue to release, and the new generation of intelligent cockpit chips AC8015 and AC8257 continue to ship, most of which will be produced in 2023; the overall car MCU market is still in short supply, and the company MCU has achieved mass production in a number of automobile brands; the company expects to gradually release its new production capacity Q4. In terms of smart driving, the company was appointed by a head car company in June and won an order in August for a domestic new energy vehicle company B's L2 ADAS software and hardware solution, which is expected to be carried on several models from the end of 2022 to the end of 2024, and part of the revenue will be confirmed by the end of this year.
In addition, based on confidence in future development prospects, the company continues to buy back shares. By the end of September 2022, the company has repurchased nearly 10 million shares, with a total transaction amount of 124 million yuan. according to the repurchase plan, the company intends to repurchase 300 million to 500 million yuan, and the buyback plan is still in progress.
Investment suggestion
The company locates the "intelligent car brain", accelerates the transformation to the intelligent travel technology company, forms the "cloud-core-driving-cabin" full stack layout, and is optimistic about the company's long-term growth potential. We estimate that the operating income of the company from 2022 to 2024 is RMB 5.388 billion, the net profit of return to the mother is RMB 367,688 million, and the corresponding EPS is RMB 0.14, 0.20 and 0.29 per share respectively. Corresponding to the closing price of 11.72 yuan per share on October 28, 2022, PE is 83.65 + 59.78 / 40.58, and PS is 7.18 + 5.23 + 3.60. Maintain the recommended rating.
Risk hint
The epidemic repeatedly affected the development of business; the research and development of new technologies was not as expected; the recovery of downstream demand was not as expected; and the competition in the industry intensified.