The company released the first quarter report of 2023. During the reporting period, the company achieved operating income of 244 million yuan, +80.89% year on year; net profit of Fumo was 102 million yuan, +96.01% year on year; net profit after deducting non-Gumo's net profit was 100 million yuan, +97.37% year on year.
The lithium battery mold business relies on the rapid growth of Dongfeng, a new energy source. The NEV market continued to grow steadily in the first quarter of 2023, boosting demand for power batteries, which in turn boosted the growth of lithium battery-related equipment. Benefiting from this, the company's subsidiary Dongguan Zhihong Precision Mold achieved main business revenue of 233 million yuan this quarter, +90.61% year on year; Guimu's net profit was 114 million yuan, +83.51% year on year. At the same time as revenue increases, the company's equity incentive expenses are expected to decrease in 2023, and cash rewards for excess performance will no longer be calculated. Report performance is expected to be further strengthened.
The penetration rate of laminates is increasing, and the growth potential of the company's related products is expected to lead the industry. Since laminated battery products have advantages in terms of battery energy density, cycle life, etc., and the continuous improvement of equipment efficiency, currently mainstream battery companies such as BYD, China Innovation Aviation, Yiwei Lithium Energy, and Funeng Technology all use lamination technology to produce power batteries, and the lamination penetration rate of the industry is also constantly increasing. The company's main product is a laminated cutting mold, which has consumable properties and is expected to benefit in the long term in the process of increasing the penetration rate of lamination.
Quality customer resources+high quality products and services maintain a solid position in the industry. The company's main customers are major domestic power battery companies such as BYD, Funeng Technology, Xingheng Power, and AVIC Lithium Battery. The company relies on strong customization capabilities and excellent follow-up services to form good customer stickiness and maintain a solid position in the industry.
The smooth development of new products is expected to provide new impetus for growth. The company has now successfully developed coated die products. The product performance is close to that of overseas companies. It has been successfully used in lithium batteries, OCR glass plates, etc., and is expected to provide new growth momentum for the company in the future.
Profit forecast and investment advice: We predict that the company's net profit for 2023/2024/2025 will be 431/627/845 million yuan, +165%/+45%/+35% compared to the same period last year. EPS is 2.56/3.73/5.03 respectively, and the corresponding PE is 23/16/12 times respectively, maintaining the “buy” rating.
Risk warning: There is a risk of changes in battery technology routes, downstream production expansion progress falling short of expectations, and risk of brain drain.