Company announcement
On January 12, 2023, the company issued a performance forecast for 2022, which is expected to achieve revenue of 839 million yuan in 2022, an increase of 47.7% over the same period last year, a net profit of 168 million yuan, an increase of 53.90%, and a net profit of 158 million yuan, an increase of 59.2% over the same period last year.
Comment
The performance has increased steadily in the past 22 years, and the communications and automobile business has continued to develop. Excluding the impact of equity payment fees (13.0948 million yuan), the company's 22-year return net profit is expected to be 181 million yuan, an increase of 58.6 percent over the same period last year, deducting non-return net profit of 171 million yuan, an increase of 64.1 percent over the same period last year. The steady growth of the company's performance benefits from the company 1) the downstream demand is strong, the company has sufficient orders on hand, and 2) the product number continues to expand and the company's production capacity continues to climb.
The category of communication products continues to expand and continue to promote the development of major customers. Over the past 22 years, the company has expanded its category of communication connectors and components, constantly expanding product models and enriching application scenarios; deepening cooperation with major customers, in addition to overseas head manufacturers Amfino and Morse, etc., it has added in-depth cooperation with Tyco to expand overseas markets through new Malaysian subsidiaries; with the continuous upgrading of product structure, it has expanded from 56G to 112G, further raising product prices and gross profit. In the past 23 years, with the deepening of cooperation with overseas customers and the expansion of new materials, the communications sector business is expected to achieve steady growth.
Xinneng car business deepens core customer cooperation and increases the value and consumption of bicycles. Over the past 22 years, the company has closely followed the development of new energy vehicles and realized the transformation from Tire2 to Tier1 manufacturers. The company continues to expand new customers and further deepen its deep cooperation with its core customer BYD. On the basis of providing electronic locks, electric pumps and other products in the past 22 years, the high voltage connectors developed by the company in 23 years will also be put into mass production one after another. In addition, in the energy storage side, the company has established good cooperation with Nandu Power supply and Honeycomb Energy to provide products such as copper bars for energy storage battery packs. With the continuous development of the products, the energy storage layout is expected to expand. In the medium and long term, the company focuses on the development of non-standard controllers and high-voltage controllers. With the further growth of landing materials, the company's new energy vehicle business will continue to grow at a high speed.
Increase research and development to enhance technological advantages, and accelerate production capacity expansion. On the R & D side, the company increased investment in R & D personnel and mold development. in the first three quarters, R & D expenses increased by 102.28% compared with the same period last year, and the proportion of R & D was 7.23% (increased 1.53pct). On the production side, the company's fixed growth project has been launched in December, with an issue price of 60.01yuan per share and a net fund-raising amount of 785 million yuan. the landing of the project will help the company break through the bottleneck of production capacity, improve order delivery capacity, and reserve space for new business development. the average annual income is expected to increase by 1 billion yuan after reaching production.
Investment suggestion
As a domestic high-quality connector manufacturer, the communications business has laid a solid foundation, and new energy vehicle business orders are growing rapidly. considering equity payment fees, we expect the company's 2022-2024 net profit to be 168 million yuan, 241 million yuan and 322 million yuan respectively, and 35 times, 25 times and 18 times respectively before the corresponding PE, maintaining the buy rating.
Risk hint
Downstream demand is not as expected and the project schedule is not as expected.