Overview of events:

The company publishes its 2012 annual report. The company's operating income in 2012 was 1.36 billion yuan, down 8.3% from the same period last year; the net profit attributed to the owner of the parent company was 6.23 million yuan, up 35.32% from the same period last year; and basic earnings per share was 0.026 yuan, up 35.57% from the same period last year. The company will not distribute profits or increase its equity in 2012.

Event analysis:

The operating environment is not ideal and operating profits have fallen sharply. The company's main products are used in camera equipment such as card cameras. In 2012, with smartphones rapidly occupying the market, card cameras shrank sharply, and low-price competition in the domestic optical industry showed fierce competition. product prices continue to decline, the company's operating costs remain high. Operating profit fell 87.08% from the previous year, net profit fell 103.39%, and gross profit margin fell 7.07%, down 2.29 percentage points from the same period last year, below Lida Optoelectronics's gross profit level of 16.90%.

Due to the influence of geographical factors, the risk of customer demand fluctuation increases. The recent Diaoyu Islands incident has strained Sino-Japanese relations, and geopolitical factors have seriously affected the company's business. The company's main suppliers and customers are Japanese manufacturers, of which the top five customers are all Japanese enterprises, accounting for 52.62% of the total revenue, and affected by the fluctuation of Sino-Japanese relations, Japanese optical enterprises in China have been de-Sinicized, and the industrial chain has gradually moved out. As a result, orders for small and medium-sized glass lenses in the company have declined rapidly, and it is expected that the impact of Sino-Japanese relations on the optical industry will further deepen, and the risk of fluctuation of customers downstream of the company will increase.

The company's products are relatively single, and structural contradictions are prominent. The structural contradiction of the company's existing products is more prominent, the products are mainly lenses and lenses, and the development of the company relies too much on optical lenses, which causes the company's products to be greatly affected by market changes, and due to the lack of terminal products, may lead to the lack of stamina for the development of the company. Although the company is currently actively engaged in product optimization and upgrading, there is still no new performance growth point.

Profit forecast and investment advice:

Profit forecast and investment advice. Although the company is the domestic optical leader, but in recent years, the competition in the optical industry has intensified, enterprises are facing low-price competition. The company's main customers are concentrated in Japan, and the recent Diaoyu Islands incident has led to the de-Sinicization of Japanese manufacturers. Considering the current international and domestic instability and the increase of uncertain factors, the company is given a "neutral" investment rating.

Risk Tips:

The instability of Sino-Japanese trade and the risk of industrial chain transfer of Japanese enterprises.

Raw material prices, rising labor costs and the risk of industry competition