The net profit returned to the mother in 2022 is in line with the performance forecast
The company announced its 2022 results: revenue of 4.199 billion yuan, an increase of 8.11% over the previous year; the net profit of the mother was 320 million yuan, an increase of 60.72% over the previous year, falling within the range of the previous performance forecast of 26-360 million yuan; after deducting non-net profit of 288 million yuan, an increase of 204.28% over the previous year. Corresponding to 4Q22 revenue was 1,113 billion yuan, a year-on-year decrease of 3.23%; Guimu's net profit was 91.66 million yuan, a year-on-year decrease of 3.32%. At the same time, the company announced that it plans to distribute a cash dividend of 0.2 yuan/share in 2022 (tax included).
Development trends
The automotive electronics business performed brilliantly, and consumer electronics revenue bucked the trend. In 2022, the company's revenue from smart terminal functional parts and precision structural parts and module products increased 5.88% year-on-year to 2,499 billion yuan. We determine that this was mainly due to the increase in the share and value of the company's consumer electronics customers in North America, which offset the impact of the slump in demand from some Android customers. Revenue from the NEV business increased 33.62% year-on-year to 1,203 million yuan in 2022, and its share of total revenue increased to 28.64% (YOY+5.47ppt). We judge that this was mainly due to a significant increase in shipments from NEV customers in North America, combined with the continuous expansion of the company's automotive product line, which led to an increase in the value of bicycles. Storage business revenue in 2022 was 427 million yuan, a year-on-year decrease of 29.09%, mainly due to weak market demand.
The revenue structure continues to be optimized, and profitability has improved markedly. The gross margin of the company's manufacturing industry increased 5.68ppt to 27.61% year-on-year in 2022. Among them, the gross margin of smart terminal functional parts and precision structural parts and modules increased sharply by 9.17ppt to 25.10%, and the gross margin of new energy vehicle products increased 2.14ppt to 34.78%. We judge that this was mainly due to the increase in revenue share of North American consumer electronics and new energy customers with higher gross margins. We believe that the continuous optimization of the company's revenue structure reflects the company's technological advantages and ability to closely cooperate with customer development. R&D expenses in 2022 were 360 million yuan (YoY +24.65%), mainly due to the company cooperating with customers in various fields such as new energy vehicles, high-power wireless charging systems, and folding screens.
Optimistic about the growth space of the automotive electronics business, innovative products will blossom more. Looking ahead to 2023, in the consumer electronics sector, the company said it will carry out product research and development in various fields such as folding screens, VR/AR, and magnetic materials. We are optimistic that the company's consumer electronics business products will continue to expand. In the field of new energy vehicles, the company has already expanded its Thai plant, built a new plant in the US and is preparing to build a new plant in Mexico in 2022 to further expand existing production capacity. We are optimistic that the automotive electronics business will continue to expand in 2023 as production capacity expands. Furthermore, the company said that hydrogen fuel cell core components have been mass-produced in small batches in 2022, and we expect new performance growth points to be formed in the future.
Profit forecasting and valuation
We keep the company's 2023/2024 net profit forecast unchanged. The current stock price corresponds to 2023/2024 price-earnings ratio of 22.7 times/18.0 times. Maintaining an outperforming industry rating and a target price of 18.00 yuan, corresponding to 27.0/21.5 times the 2023/2024 price-earnings ratio, there is 19.28% room for an increase from the current stock price.
risks
Demand for consumer electronics is sluggish; NEV customer shipments fall short of expectations; Weber Precision continues to lose money.