Company announcements
On April 18, the company released its 2022 annual report and 2023 quarterly report.
In 2022, the company achieved revenue of 839 million yuan, an increase of 47.74% over the previous year; the net profit returned to the mother was 168 million yuan, an increase of 54.02% over the previous year.
In the first quarter of 2023, the company achieved revenue of 162 million yuan, a decrease of 8.18% over the previous year; it achieved net profit of 33.2178 million yuan, an increase of 3.06% over the previous year.
reviews
First-quarter performance was resilient, and the ratio of the main business structure was optimized. Cloud computing capital expenditure tightened in the first quarter, and the NEV industry entered a stage of market-based competition. The company achieved month-on-month growth on the profit side with continuously expanding product categories, continuous development of downstream customers, and flexible cost adjustments. The gross profit margin and net interest rate increased to 37.57% and 20.51% respectively.
AIGC drives demand for data centers, and the communications business accelerates the development of new products and customers. In 2022, the total revenue of the communications business was 552 million yuan, accounting for 65.81%, an increase of 33.21% over the previous year; among them, CAGE products accounted for 46.64%, an increase of 46.42% over the previous year. The company's communication connector products are mainly used in servers, data centers, etc., and has cooperated deeply with core customers such as Amphenol and Moss for decades.
The high-quality growth of the business has benefited from 1) accelerated new product development, mass-produced the 2XN CAGE series in '22, cooperated with customers to develop QSFP 112G and QSFP-DD series products in '23; 2) increased the penetration rate of new customer products and new customer development, increased the penetration rate of 56G products and the ratio of installed radiators in '22, successfully entered the Tyco Communications business module in '23, and developed cooperation with CAGE and structural component products.
The new energy vehicle business binds high-quality customers to continuously increase the value of bicycles. In 2022, the revenue of the automobile business was 161 million yuan, accounting for 19.23%, an increase of 112.51% over the previous year. In '22, the company achieved a transformation from a Tier 2 to a Tier 1 manufacturer, seizing opportunities for the rapid development of the new energy vehicle industry. 1) On the product side, products such as electronic locks, electric water pumps, and electronic control units have been gradually introduced into slope-climbing mass production, and products such as high-voltage connectors and controller system connectors will be developed one after another in '23. 2) Clients, deepening cooperation with core customers such as BYD, Nandu Power, Honeycomb Energy, etc., while developing new customers such as Changan, Fuao, and Xiaopeng. In the medium to long term, the company focuses on the development of non-standard controllers and high-voltage controllers. With the further increase in landing numbers, the company's new energy vehicle business will continue to grow rapidly.
The fixed increase project progressed steadily, and Malaysian factories were deployed to meet overseas demand. In order to meet rapidly growing downstream demand, the company completed a fixed increase project last year (net capital raised 785 million yuan). Currently, the second phase of the project has been completed and put into operation, and the third phase of construction has begun. At the same time, in terms of overseas layout, a new Malaysian subsidiary was established to extend the industrial chain, achieve a multi-point layout, and help the company's overseas customers develop.
Investment advice
As a high-quality domestic connector manufacturer, the communication business benefits from the increase in demand for digital communication under the AI development wave, and the NEV business tied to major customers is growing rapidly. We expect the company's net profit of 236 million yuan, 314 million yuan, and 412 million yuan respectively in 2023-2025, corresponding to the current PE of 31 times, 24 times, and 18 times, respectively, maintaining the purchase rating.
Risk warning
Downstream demand falls short of expectations, project progress falls short of expectations