Increase R & D investment and maintain "buy" rating
According to the company's three-quarter report, 22Q1-Q3 's income was 2.078 billion yuan, an increase of 11.5%, and the net profit returned to its mother was-59 million yuan, compared with-42 million yuan in the same period last year. 22Q3's single-quarter income was 710 million yuan, an increase of 6.7%, and a net profit of-24 million yuan, compared with 14 million yuan in the same period last year. The loss increased in the first three quarters, mainly due to: 1) the external environment affects the related business of vehicle networking; 2) equity incentive amortization expenses of 97 million yuan; 3) increased investment in research and development. It is estimated that the EPS for 22-24 years is 0.11 pound 0.15 pound 0.22 yuan. Segment valuation: 1) Chip business 22e net profit 133 million yuan, comparable company average 22e 21.1xPE (Wind), give 22e 21.1xPEX Wind 2) other business 22e income 3.215 billion yuan, comparable company average 22e 10.8xPS, give 22e 10.8xPS, target price 15.76 yuan (based on the new share capital conversion before the value of 19.51 yuan), "buy".
Smart core business benefits from high magnificent demeanor, and the development of smart driving business is promising.
By the end of 22Q3, the company's inventory was 623 million yuan, an increase of 69.5% over the beginning of the year, mainly due to the increase in contract performance costs and chip products in the current period; the advance payment was 177 million yuan, an increase of 103.3% over the beginning of the year, mainly due to the company's increase in stock. The company actively seizes the opportunities of the industry, and the smart core business is expected to continue to benefit from the industry's high-profile demeanor. In addition, the company continues to make breakthroughs in the smart driving business. according to the company announcement, in June 2022, the company obtained a fixed point of an L2 self-driving assistance system; in August 2022, the company announced that it had received a cooperation order for the ADAS system of a domestic new energy vehicle company B, and it is expected to achieve volume production on several models from the end of 2022 to the end of 2024. In September 2022, Siwei Tuxin signed a strategic cooperation agreement with Niomo Zhihang to jointly explore intelligent driving, mapping services and other areas in the future.
Investment in R & D continues to increase and cash flow improves
The sales / management / R & D expense rate of 22Q1-Q3 Company is 6.3%, 13.4%, 47.6%, up 1.0/1.1/1.0pct year-on-year, of which the 22Q3 sales / management / R & D expense rate is 7.2%, 9.6% and 51.5%, which is a year-on-year change 1.7/-2.3/6.6pct. The increase in 22Q3 development spending is mainly due to the company's continued increased R & D investment in projects such as self-driving maps and self-driving cloud platforms. Continuous R & D investment will help the company to comply with the trend of automobile intelligence and enhance its comprehensive competitiveness in the field of intelligent vehicles. The net cash flow generated by 22Q1-Q3 's operating activities was 56 million yuan, an increase of 136%, of which the net operating cash flow of Q3 was 53 million yuan, with an increase of 252%. Q3 sales rebate increased, and the cash flow situation improved.
Multi-link layout is expected to continue to benefit from the trend of automobile intelligence.
The company's layout of "smart driving, intelligent module, Zhiyun, Zhixin" is expected to continue to benefit from the trend of automobile intelligence. Considering that the related business of vehicle networking is affected by the external environment, the revenue forecast is lowered. The company continues to strengthen its R & D investment and raise its cost forecast. It is estimated that the income from 2022 to 2024 will be 5.571 billion yuan (3.928 50.07 million yuan), and the net profit will be 366 million yuan (660 million yuan).
Risk hint: the R & D results are lower than expected, and the progress of smart driving commercialization is lower than expected.