Events:
Lianchuang Optoelectronics announced its results in the first three quarters of 2022. 2022Q1~Q3 realized revenue of 2.977 billion yuan, year-on-year-8.88%, and net profit of 268 million yuan, + 7.51%, and Q3 alone realized revenue of 772 million yuan, year-on-year-40.48%, and net profit of 89 million yuan, 8.35%.
Main points of investment:
The change of product structure drives the gross profit margin to rise, and the profit of Hongfa Electric Acoustics of the participating company is stable.
2022Q3's gross profit margin is 18.08%, year-on-year + 8.32pcts, month-on-month + 4.22pcts. The main reasons for the improvement in profitability are: 1) the company's laser industry business profit margin is relatively high and develops rapidly. 2022Q3 realized revenue of 50.4189 million yuan, + 423.44% compared with the same period last year, and realized net profit of 12.8418 million yuan, + 1110.14% compared with the same period last year, and sales net interest rate 25.47%. 2) the company increases the management investment to reduce the cost effectively. The company has made great efforts to develop laser superconducting business, and the proportion of sales is expected to continue to increase. The company participates in 20% of Hongfa's shares, and the investment income is stable. 2022H1 Hongfa achieved operating income of 5.869 billion yuan, + 18.64% year-on-year, and net profit of 884 million yuan, + 23.46% compared with the same period last year. Considering that the 2022H1 income of listed company Hongfa shares all comes from Hongfa Electric Sound, Hongfa shares 2022Q3 realized operating income of 3.09 billion yuan, + 18.06% year-on-year, and realized home net profit of 348 million yuan, + 15.66% compared with the same period last year. Lianchuang Optoelectronics investment income is expected to continue to improve.
The operating efficiency continues to improve, and the expense rate is expected to decline in the future. 2022Q3 company sales rate 2.36%, year-on-year + 0.99pcts, month-on-month + 0.27pcts; management fee 7.27%, year-on-year + 3.49pcts, month-on-month + 2.57pcts; R & D rate 4.32%, year-on-year + 1.07pcts, month-on-month + 0.74pcts. The reasons for the increase in expense rate are: 1) the company increases its management investment to accelerate the adjustment of product structure and reduce costs; 2) the company's R & D expenditure in 2021 is 170 million yuan higher than the same period last year; 15.65% in the first three quarters of 2022; and-15.15% in the first three quarters of the same period last year. The company's technological transformation has achieved remarkable results, and R & D investment has increased steadily. 2022Q3 achieved a net profit rate of 15.25%, year-on-year + 6.39pcts, month-on-month + 0.62 pcts; benefiting from the increase in gross profit margin, the company's operating efficiency has steadily improved. At present, the company basically overcomes the main technical difficulties in the field of semiconductor laser and high temperature superconductor. with the promotion of industrial optimization and the policy of reducing cost and increasing efficiency, the cost rate is expected to decline in the future.
Transformation and upgrading are under way, and laser superconductivity can be expected in the future. 2022Q3 realized the net profit of 89 million yuan,-8.35% compared with the same period last year, and deducted the non-return net profit of 80 million yuan,-12.95% of the same period last year.
The company is in the transition stage of business transformation, 2022H1 has completed the divestiture of traditional cable assets, and plans to spin off the main backlight products. In terms of controller business, affected by the decline in domestic home appliance market demand, the company's revenue from the controller business 2022Q3 reached 507 million yuan, down 1.50% from the same period last year, and the net profit was 48.0074 million yuan, an increase of 36.74% over the same period last year.
The company plans to focus on the field of laser and superconductor, and the certification of superconducting energy saving and emission reduction has been launched, and the first batch of superconducting equipment was successfully held on September 26, 2022. As of September 30, 2022, more than 10 superconducting equipment have been ordered.
According to the company's adjustment of the original core business structure and the layout of the new business, and based on the prudent principle, the profit forecast and investment rating do not consider the impact of the divestiture of the company's related assets in the backlight plate for the time being. We estimate that the company's operating income will be 40.15 shock 44.41 billion yuan in 2022-2024, a year-on-year growth rate of 12%, 11%, 16% respectively. The net profit of homing is 356 pesks, 438 pesks, 571 million yuan, and the year-on-year growth rate is 53 percent, 23 percent, and 30 percent respectively.
Corresponding to 2022-2024 PE is 36-30-23 times, maintaining the "buy" rating.
Risks suggest that the progress of research and development is not as expected; the market expansion of isolation chips is not as expected; the application of automotive chips is not as expected; the application of photovoltaic inverters is not as expected; the market competition is intensified.