Events:
The company announced that in 2022, Q2 reported operating income of 4516 million yuan (YoY+5%,QoQ-8%), gross profit of 826 million yuan (YoY-23%,QoQ-14%) and net profit of 145 million yuan (YoY-63%,QoQ-29%).
Main points of investment:
Overall performance: Q2 revenue rose 4.6% in 2022 compared with the same period last year, due to a steady increase in market share of electromagnetic drives and precision components, optical products, sensors and semiconductor devices. In terms of profitability, gross profit and homing net profit decreased by 23% and 63% respectively compared with the same period last year, mainly due to the increase in the proportion of income from precision components with low gross margin and the intensification of competition in the optical industry.
Acoustic products: affected by the current adverse factors of the external environment, the weak trend of consumption in the Android mobile phone market has affected part of the company's revenue performance. Q2 company's acoustic product revenue in 2022 was 1910 million yuan, down 5% from the same period last year, but the gross profit margin recovered month-on-month and rose to 27.7%. The reason is that the company has achieved an increase in market share by continuously ensuring the stable delivery of major customers, while continuously optimizing product management. Using the method of digital transformation to reduce cost and increase efficiency, the month-on-month recovery of gross profit margin has been successfully realized. In addition, vehicle acoustics focuses on overseas markets and actively develops new customers. At present, the project is progressing smoothly.
Optical products: in 2022, the revenue of optical products of Q2 company increased by 14.9% to 929 million yuan compared with the same period last year, and the shipments of optical modules increased by 116.6% year on year. Thanks to the company's core strategy of vertical integration and customers' full recognition of the group's R & D and manufacturing capabilities, optical product shipments have increased greatly, but the fierce competition in the optical industry has repeatedly led to a decline in the overall plastic lens ASP in the industry. In the future, the company will optimize the structure of products and customers while maintaining the increase of market share, and further enhance the level of profitability. In addition, the company will split the optical business to A-share listing, through an independent financing platform to provide support for the development of the company's optical business in order to reduce phased performance pressure.
Electromagnetic drives and precision components: in 2022, Q2's revenue from electromagnetic drives and precision components increased by 17.4% year-on-year to 1.43 billion yuan, mainly due to a 49.4% month-on-month increase in Android motor shipments and a significant revenue contribution from Dongyang Precision. In addition, the industry-leading RichTap cross-platform tactile solution launched by the company has been fully recognized by mobile phone customers, the penetration rate has increased steadily, and it has been successfully promoted into the game console, AR/VR and automotive markets. The company's tactile solution has been successfully introduced into the global head VR product supply chain, which is expected to become a new performance growth point.
Sensors and semiconductor devices (MEMS): Q2 sensors and semiconductor devices grew 1.3% to 241 million yuan in 2022, but gross profit margin fell 2.6% to 13.2%.
While maintaining a high market share of mobile phone business, the company will continue to expand in IoT, smart home, wearable devices, cars and other markets in the future, and insist on optimizing product performance, hoping to bring customers mobile phones, TVs, TWS headphones and notebook PC markets for products with higher signal-to-noise ratio, smaller size and lower power consumption, which will further promote performance growth.
Profit forecast and investment rating: we estimate that the company's revenue from 2022 to 205.11 pounds will be 189.92 billion yuan, the net profit from its mother will be 1.05 billion yuan, and the corresponding basic EPS will be 0.68 shock 0.81 pound 0.91 yuan, and the corresponding multiple of 18.15X/15.12X/13.41X will be 18.15X/15.12X/13.41X. The company's acoustic products and electromagnetic drive business income is stable, precision components business in the acquisition of Dongyang precision business will have a broad space for development in the future, optical business profitability is expected to improve, for the first time coverage, given "overweight" rating.
Risk tips: increased competition in the industry, lower-than-expected progress in optical business profitability optimization; geopolitical conflicts, resulting in supply chain disruption; technological leapfrogging and substitution, subverting the company's existing technological advantages; and the impact of the epidemic, dragging down the global economic recovery.