Incidents: In 2022, the company achieved revenue of 2,203 million yuan, +55% year on year; net profit of the mother was 154 million yuan, +67% year on year; net profit of the non-return mother was 149 million yuan, +62% year on year.
The company's revenue grew steadily. The company achieved revenue of 576 million yuan in 22Q4, +32% year on year; net profit of the mother was 35 million yuan, -7% year on year; gross profit margin was 19.8%, all up from the same period last year. The company's R&D expenses in 2022 were 50 million yuan, +36% year on year. The company continues to increase investment in R&D to seize automotive electronics opportunities.
The company's gross distribution margin continues to rise, and the expansion of the automotive wire-controlled chassis market has led to an increase. In 2022, the company's distribution business achieved revenue of 1,968 billion yuan, +47% year on year, and gross margin of 17.86%. Through product structure optimization, the gross margin of the company's distribution business increased further compared to 22H1 (17.69%) in 2022. In 2022, the company's passive component distribution gross margin was 25.85%, which was higher than the gross profit margin of the company's distribution business, and its revenue share further increased. The company's automotive electronics distribution business covers the four major markets of automotive lighting, car cockpits, automotive passive components, and automotive wire-controlled chassis. Among them, wire-controlled chassis is expected to bring growth to the distribution business.
The company's power management ICs have grown rapidly and their profitability has increased. The company's power management IC design business achieved revenue of 221 million yuan in 2022, +207% year on year, of which 85 million yuan was achieved in Q4, maintaining a rapid growth trend. The gross margin of the company's IC business in 2022 was 42.68%, net profit reached 36 million yuan, and net interest rate was 16.31%, indicating good profitability. The company merged with Shenzhen Ochuangxin in August '22. Its revenue and net profit for '22 were 0.75 million and 18 million yuan respectively, and the net interest rate reached 24.74%. Through the merger and acquisition of Oechuangchip, the company expanded its coverage of DC/DC parts numbers and is expected to further enhance the profitability of the IC business.
The IC design team continues to expand, and the company's IC product layout has been further expanded. By the end of 2022, the company's IC design team had 56 IC design engineers. The team had rich IC R&D and design experience, including 33 engineers with more than 10 years of work experience. The ever-expanding IC design team has brought the company's rich IC product line. At present, the vehicle regulation IC products that the company has mass-produced are mainly motor drivers, LED drivers, LDO, and DC/DC. Other mass-produced products include automotive-grade dual-mode Bluetooth modules, low-power Bluetooth modules with audio interfaces, and offline voice control elevator modules (establishing AI training capabilities). The products being developed by the company include MCUs (used in vehicle lights), motor drive chips, various DC/DC models, etc., and it is expected that the application range of the company's IC products will be expanded to the fields of industrial control, smart homes, sweepers, etc.
Investment advice: We expect to achieve revenue of 2,539/30.14/3,574 billion yuan in 2023-2025 and achieve net profit of 2.07/269/342 million yuan, corresponding to PE 25/19/15 times the market value on April 11, respectively.
Risk warning: Risk of R&D failure, increased industry competition, and downstream demand falling short of expectations.