Forecast 2022 year-on-year increase in 2022 net profit 30.59% MUR 80.81% the company issued a 2022 performance forecast, which is expected to achieve a net profit of 260 million yuan to 360 million yuan, an increase of 30.59% RMB80.81% over the same period last year; deducting non-net profit of RMB 255 million-355 million, an increase of 169.44% and 275.10% over the same period last year. The company said that the outstanding performance is mainly due to: 1) the steady improvement of new energy vehicle business, and the growth of individual value and market share of consumer electronics core customer products; 2) the company has been effective in reducing costs and increasing efficiency.
Corresponding to 4Q22, the net profit reached 31.66 million yuan to 132 million yuan, up-66.61% to 38.87% over the same period last year, while the non-net profit was deducted from 37.4 million yuan to 137 million yuan, an increase of 684.57% to 2778.81% over the same period last year.
Pay attention to the main points
The business of new energy vehicles is growing steadily, and the proportion of revenue is increasing. The company said that the increase in customer shipments led to a significant increase in the company's orders, benefiting from the rapid development of the new energy vehicle industry. We expect the company's new energy vehicle business to maintain a bright growth rate and increase its share of revenue in 2022. Looking to the future, we are optimistic about the two major development directions of the company's automotive business: 1) in terms of international customer cooperation, the company says that in recent years, the company has gradually expanded its plant in Thailand and built a new plant in the United States. The company expects the American plant to be put into mass production in 2023. We expect to contribute to revenue growth. 2) in terms of wireless charging system products, the company said that it has independently developed a wireless charging system for new energy vehicles and cooperated with domestic mainstream terminal car manufacturers, and the company expects to produce small quantities in 2023. We are optimistic that with excellent product matching capabilities, the company will continue to expand the automotive electronic product matrix and new customers in the future, and open up long-term growth space.
Consumer electronics business maintained growth, technology upgrading helped ASP and share increase. The company said that the growth of consumer electronics business income and net profit in 2022 is mainly due to the increase of single unit value and market share through technology upgrading. Specifically, the revenue of 1H22 intelligent terminal functional parts and precision structural components and modules increased by 32.05% compared with the same period last year. Considering that international customers have entered the pull cycle in the second half of the year, we expect the business of 2H22 functional parts and precision structural parts to continue to grow. Looking to the future, we are optimistic that the company will continue to give full play to its technological innovation advantages in terminal products such as smartphones, tablets and laptops, and make new breakthroughs on the basis of steady growth.
Profit forecast and valuation
Taking into account the low demand for consumer electronics business, we lowered our 2022 net profit forecast by 6.4% to 300 million yuan, leaving the 2023 net profit forecast unchanged, and introducing a new net profit forecast of 570 million yuan in 2024. The current share price corresponds to a 24-year price-to-earnings ratio of 20.5 times / 16.3 times earnings. Based on the promising business development prospects of the company's core customers of new energy vehicles and consumer electronics, it maintains an outperforming industry rating and a list price of 18.00 yuan, corresponding to 27.0 times 2023 price-to-earnings ratio and 21.4 times 2024 price-to-earnings ratio, which has 31.6% upward space compared with the current stock price.
Risk
Demand for consumer electronics is sluggish; shipments of new energy vehicles in North America fall short of expectations; and Weibo Precision continues to lose money.