Incident: On the evening of March 27, the company disclosed its 22-year annual report and 23-year equity incentive plan. The company achieved revenue of 2.93 billion yuan in '22, +26.4% year on year; net profit of the mother was 3.1 billion yuan, +71.2% year on year; after deducting the net profit of the non-Gimo mother was 290 million yuan, 85.5% year on year.
Revenue and earnings continued to increase year over year in Q4. The month-on-month decline was mainly affected by the high base in Q3. The company's Q4 revenue was 8.2 billion yuan, +23.0% year on year, -26.6% month on month; gross profit margin was 38.8%, +9.8 pcts year on year, -2.3 pcts month on month; net profit was 83 million yuan, +168.9% year on year, -55.8% month on month; Guimu's net profit was 77 million yuan, +228.2% year on year, -58.2% month on month; Guimu's net interest rate 9.4%, +5.9 pcts year on year, -7.1pcts month on month. All of the company's indicators showed a year-on-year growth trend. The month-on-month decline was mainly influenced by the high base of 22Q3. 22Q3 and 22Q4 company revenue reached new Q3 highs and Q4 highs respectively, demonstrating the company's strong performance growth momentum.
Consumer Electronics+Semiconductors continued to gain strength throughout the year, and the profitability of new energy sources improved. By business, the consumer electronics business had revenue of 2.45 billion yuan in '22, +30.4% year on year. The company's cooperation with Apple continued to expand in depth; the semiconductor business had revenue of 290 million yuan, +34.3% year on year. Customers such as Sumco, Sksiltron, Samsung, and Easway had excellent resources; and the new energy business had revenue of 180 million yuan, a corresponding gross profit margin of 20.8%, +2.73pcts year on year. The company established long-term stable cooperative relationships with customers such as China Automobile, Nippon Power Plant, and Murata New Energy. Both the consumer electronics and semiconductor business maintained a high growth rate, and the growth trend was good during the downward cycle; while the gross margin of the new energy business improved significantly. At the same time, the company has set up holding subsidiaries in the United States, Japan, South Korea, Vietnam and other places. Localized operation helps the company accurately grasp customer needs and provide timely and convenient products and services.
High inventory+high contract debt indicates strong order demand, and equity incentives chart a blueprint for growth. The company's inventory in '22 was 1.62 billion yuan, +94.4% over the same period. The increase in inventory was mainly due to the continuous increase in orders being executed in '22. The raw materials and products produced by the company increased accordingly. At the same time, the number of goods shipped without inspection after delivery by the company also increased. The company's contract debt was 500 million yuan, +90.4% year on year, mainly due to the increase in advance receipts received by the company from the semiconductor industry and consumer electronics industry at the end of '22. We believe that the double increase in the company's inventory and contract liabilities indicates the company's strong order demand. At the same time, the company announced an equity incentive plan to award 9.999 million shares, accounting for 4.8% of the total share capital. The equity incentive assessment target is a 10%/20% increase in non-net profit in 23/24 compared to '22. We think Apple MR may be released in '23, and the high interactivity of MR products makes inspection/assembly more demanding and demanding. The company is expected to continue to increase consumer electronics equipment shipments under this trend. Meanwhile, semiconductor equipment giant KLA is gradually withdrawing from China, which also provides broad domestic replacement space for the company's semiconductor testing equipment.
Investment advice: We expect to achieve revenue of 42.4/52.5/65.1 billion yuan in 2023-2025, and net profit of 42/52/650 million yuan, corresponding to PE of March 28, 21/17/14 times, respectively.
Risk warning: Consumer electronics terminal product innovation falls short of expectations; the company's business market expansion falls short of expectations; the company's semiconductor and new energy equipment technology research and development falls short of expectations.