Brief performance review
On the evening of January 30, 2023, the company released its 2022 annual report performance forecast. It expects to achieve revenue of 1.50 billion yuan (+12.73% year-on-year) in 2022, net profit of 141 million yuan (+40.87% year-on-year), and net profit of 135 million yuan (+44.48% year-on-year) after deducting non-return to the mother. Looking at a single quarter, the company achieved revenue of 3.7 billion yuan (-3% month-on-month), net profit of 43 million yuan (+9% month-on-month), and net profit of 42 million yuan (+10% month-on-month) after deducting net profit of non-return to the mother.
Management analysis
Focusing on BMS to seize the growth momentum of new energy vehicles, costs fell and profits rebounded. The company's profit increased dramatically, mainly due to two reasons: 1) The company is a PCB supplier mainly located in the NEV field, accounting for 46% of automotive electronics revenue in 2021. It mainly focuses on BMS systems (battery management systems) related to new energy vehicles. At the same time, it participated in the development of energy storage products, which achieved steady growth in revenue in 2022 when sales of new energy vehicles grew rapidly and demand for energy storage exploded; 2) In 2022, when combined with the company's significant bargaining power with suppliers after listing As a result, the company's costs improved significantly in 2022, profitability rebounded, and it was possible to achieve profit growth exceeding revenue growth.
The cutting-edge layout has taken the lead in development, and the energy storage relay is growing. Compared with other comparable companies, the company's competitive advantage is more prominent: 1) The company's automotive electronics share has reached 46%, the product layout is dominated by BMS, and is deeply involved in the rapid development of new energy vehicles, which is expected to smoothly expand into the energy storage sector in the future; 2) Deeply tied to the Ningde era (the company's supply share is 60%, and Ningde indirectly holds 7.19% of the company's shares through Changjiang Chendao). Using the big customer effect, the company's BMS products have expanded to high-quality customers such as Guoxuan Hi-Tech and Funeng Technology, and have also been extended to the energy storage sector, supporting Ningde's energy storage era. Enjoy energy storage growth dividends with Payneng Technology.
Profit Forecasts, Valuations, and Ratings
The new energy sector is facing rapid development opportunities. Through the IPO, the company raised 1.15 billion yuan to build a new production capacity of 1.2 million square meters per year (issuing 37.79 million shares, with an issue price of 30.38 yuan/share, exceeding the plan of the fund-raising project by 360 million yuan). In our previous forecast, we underestimated the company's profit recovery. We raised the company's net profit from 2022 to 2024 to 1.41 (6% increase) /23/330 million yuan. The corresponding EPS was 0.93/1.52/2.17 yuan, and the corresponding PE was 28X/17X/12X, continuing to give a “buy” rating.
Risk warning
Demand fell short of expectations; competition intensified; raw material price reductions fell short of expectations; risk of exchange rate fluctuations; risk of restricted shares being lifted.