Short-term pressure does not change the growth trend and maintains the “buy” rating
The company released its 2022 annual report, and the company's performance was under short-term pressure. Considering the impact of the epidemic, we lowered our profit forecast for 2023-2024 and added 2025. It is estimated that the net profit for 2023-2025 will be 1.27, 2.04, 2.72 (originally 5.02, 751) yuan, EPS is 0.05, 0.09, 0.11 (originally 0.21, 0.32) yuan. The current stock price corresponding to PE is 233.7, 145.2, and 109.2 times. Orders for smart driving and maps will continue to land, and future growth can be expected to maintain the “buy” rating.
Event: The company released its 2022 annual report and the first quarter report of 2023
(1) In 2022, the company achieved revenue of 3,347 billion yuan, an increase of 9.37% over the previous year; the net profit of the mother was -336 million yuan, a decrease of 375.48% over the previous year. The losses were mainly due to the decline in commercial vehicle networking business, the increase in R&D investment of smart cars and smart chip R&D of 150 million yuan, and amortization expenses generated by equity incentives exceeding 100 million yuan. By business, the revenue of Zhiyun, Smart Cabin, Zhixin, and Smart Driving was 2,060, 619, 502, and 131 million yuan respectively. Zhiyun's business has been growing steadily; smart cabin business has declined due to commercial vehicles; orders for integrated software and hardware for intelligent driving have continued to land, and revenue has increased 20 times; MCU and SoC chips have continued to be released, revenue has increased by more than 40%, and the growth of smart driving and smart chip is prominent.
(2) 2023Q1, the company achieved revenue of 707 million yuan, an increase of 13.71% over the previous year; the net profit of the mother was 103 million yuan, down 972.33% from the previous year, mainly due to increased material and project costs and increased R&D investment.
Orders for smart driving and maps continue to land, and future growth can be expected
(1) The penetration rate of intelligent driving is rapidly increasing, and the front-loading rate for assisted driving below L2 exceeds 50%. The level of intelligence in the future may be the key to differentiated competition among OEMs. High-precision maps are standard for advanced autonomous driving, and demand is expected to continue to rise. Since the end of 2022, the company has successively received orders for FAW Hongqi High-Precision Maps (2024-2029 mass-produced models), BMW ADAS maps and high-precision maps, and Dongfeng Passenger Vehicle high-precision maps (mass-produced models starting 2024). Orders have continued to be implemented, laying the foundation for future growth. (2) The company successfully transitioned to Tier 1 in the field of intelligent driving solutions. Leading new energy vehicle manufacturer projects continued to land, and orders and revenue achieved a qualitative leap forward, demonstrating the company's competitive strength, and the smart driving business can be expected in the future. (3) As the company's equity transfer continues to advance, one of the partners of the equity transferee, Tang Xincheng, is the Beijing Yizhuang International Emerging Industry Investment Center. It is expected that it will continue to empower the company on the industrial side, favoring the company's long-term development.
Risk warning: orders fell short of expectations; market competition intensified; R&D investment was not as good as expected.