Incident: The company released its 2022 annual report on March 27. The company achieved revenue of 2,930 million yuan for the full year of 2022, an increase of 26.36% over the previous year; achieved net profit of 307 million yuan, an increase of 71.17% over the previous year; and realized net profit of 287 million yuan, an increase of 85.53% over the previous year. On a quarterly basis, the company achieved revenue of 819 million yuan in Q4 2022, an increase of 22.96% over the previous year, a decrease of 26.55% over the previous year; it achieved net profit of 77 million yuan, an increase of 228.16% over the previous year, a decrease of 58.15% over the previous year; and achieved net profit of 64 million yuan after deducting non-return to the mother, an increase of 198.03% over the previous year and a decrease of 65.03% from the previous month.

Performance grew rapidly and profitability increased dramatically: In 2022 as a whole, the company achieved a net profit attributable to parent company owners up 128 million yuan compared to 2021, and performance increased rapidly. By industry, in 2022, the company's consumer electronics equipment revenue was 2,452 million yuan, up 30.39% year on year; gross profit margin was 41.03%, up 0.06 pt year on year; semiconductor equipment revenue was 291 million yuan, up 34.30% year on year; gross profit margin was 44.86%, up 0.17 pct year on year; new energy related equipment revenue was 180 million yuan, down 16.73% year on year, gross profit margin 20.81%, up 2.73 pct year on year. The company's gross margin for the full year of 2022 was 40.10%, an increase of 0.98 pcts over the previous year; the company's net profit margin for the full year was 10.97%, an increase of 2.73 pcts over the previous year.

The company's profitability increased dramatically in 2022, mainly because the company strengthened customer stickiness and continued to receive customer orders, and the sales scale continued to grow. In terms of expenses, the company's sales, management, R&D and financial expenses rates for the full year of 2022 were 9.60%/8.82%/10.26%/-0.26%/-0.18% respectively. The year-on-year changes were -0.02/-0.10/-0.47/-2.17pcts, respectively. Expenses were all reduced year over year, and the company's fee control results were remarkable; financial expenses fluctuated greatly year over year, mainly due to increased exchange benefits and a decrease in interest expenses.

Strong demand for consumer electronics devices is expected to benefit from the launch of new Apple products: with the popularity of mobile internet applications, the global mobile device market represented by smartphones, tablets, and laptops is growing rapidly.

Statista expects the global consumer electronics industry market to reach $1.11 trillion in 2023. The expansion of market size brought about by the diversification and intelligent development of consumer electronics products will drive an increase in market demand for high-end upstream electronic product testing equipment. In the field of intelligent consumer electronics equipment, the company plans to expand horizontally in terms of product variety to assemble and test a full range of equipment to further increase the company's market share. The company's main consumer electronics customer is Apple, and the company continues to expand the depth of cooperation with Apple. According to foreign media reports, Apple will unveil Apple's first mixed reality (MR) headset device at the Global Developers Conference in June of this year, and the iPhone 15, which will be launched in the second half of this year, will further boost demand for consumer electronics devices and are expected to drive growth in the company's consumer electronics equipment performance.

The semiconductor industry has broad prospects and lays out new energy sources to help the company develop: the company is vigorously enhancing R&D capabilities in the fields of high-end semiconductor intelligent equipment, new energy intelligent equipment, etc., expanding the application scale of the company's products and improving the product structure. According to statistics from VLSI Research, the global semiconductor inspection and measurement equipment market reached 7.65 billion US dollars in 2020, an increase of 20.1% over the previous year. The market size is expected to exceed $9 billion in 2022. According to the China Business Industry Research Institute, global electric vehicle sales will further increase to 156.35 million units in 2023, with a compound annual growth rate of 25.4% from 2022 to 2026. In the semiconductor industry, the company entered the field of wafer inspection equipment through the acquisition of Japan's OPTIMA, the world's leading wafer inspection equipment supplier. It has high-quality customers such as sumco, sksiltron, Samsung, Easway, Zhonghuan Semiconductor, and Jin Ruihong. It has achieved further breakthroughs in the domestic high-end integrated circuit equipment market and is expected to accelerate domestic substitution. In the new energy industry, the company entered the new energy industry market through its subsidiary Suzhou Saiteng Lingou. Its products are suitable for new energy components, lithium batteries, etc. The company has also established long-term and stable cooperative relationships with customers such as Continental Automobile, Nippon Power Plant, and Murata New Energy. The company will continue to benefit from the rapid development of the semiconductor and new energy industries, and revenue is expected to continue to grow.

The first coverage gave an “increase in holdings” rating: the company is a high-tech enterprise specializing in providing intelligent manufacturing solutions, mainly engaged in R&D, design, production, sales and technical services of intelligent manufacturing equipment. The company's products and services mainly cover consumer electronics, semiconductors, new energy vehicles, lithium batteries, photovoltaics and other business fields. The company is a leading consumer electronics equipment company. It increases the company's market share through upward assembly of product varieties. Demand for consumer smart devices is still strong, and the company's consumer electronics business revenue is expected to continue to grow.

In the semiconductor and new energy market, the company has increased investment in R&D in the semiconductor and new energy fields, expanded the scale of product application, and improved the product structure; the semiconductor and new energy market is expected to become a new profit growth point for the company. The company's net profit for 2023-2025 is estimated to be 413 million yuan, 520 million yuan, and 653 million yuan respectively, EPS is 2.17 yuan, 2.73 yuan, and 3.42 yuan respectively, and PE is 22X, 18X, and 14X respectively.

Risk warning: the risk of increased market competition, the risk of exchange rate changes, the risk of high customer concentration, the risk of macroeconomic fluctuations and policy changes.