3Q22 performance meets performance forecast
The company announced 3Q22 results: revenue of 1.125 billion yuan, an increase of 0.63% over the same period last year; net profit of 91.34 million yuan, up 20.47% over the same period last year; and 83.86 million yuan of non-net profit, an increase of 10.62% over the same period last year. The company's 3Q22 homing net profit fell into the previous performance forecast range of 80 million yuan-102 million yuan.
Trend of development
The performance of consumer electronics international customers is outstanding, and automotive electronic materials continue to grow at a high speed. 3Q22's revenue is basically stable compared with the same period last year, with a month-on-month increase of 24.2%. We judge that: 1) the consumer electronics international customers have entered the peak season, driving the company's revenue growth; but the revenue from Android customers may have declined, mainly affected by poor terminal demand; 2) the automotive electronics business continues to maintain a high growth trend.
The gross profit margin has improved significantly, and the distribution of R & D efforts has been strengthened in the long run. 3Q22's gross profit margin increased 5.4ppt/ month-on-month to 29.2% compared with the same period last year. We judge that on the one hand, due to the increase in revenue from the high gross margin automotive electronics business, the income structure has been continuously optimized; on the other hand, the company has also improved the gross profit margin of new products for international consumer electronics customers, reflecting the company's competitiveness in the main consumer electronics industry. In terms of expense rate, the R & D expenditure rate increased to 9.5% in the third quarter compared with the same period last year. We judge that the main reason is that the company continues to explore new energy vehicles, major customers, new product development and other areas.
We are optimistic about the diversified product expansion of automotive electronics business and open up room for long-term growth. In the past few years, with high-quality product supply and supporting R & D capabilities, the company's income from international major customers of new energy vehicles has achieved sustained and rapid growth. Looking to the future, on the one hand, we are optimistic that the company's automotive electronics revenue will continue to grow with the expansion of international major customers' production capacity and sales; on the other hand, the company also continues to layout and explore products such as high-power wireless charging systems for new energy vehicles. according to the public research summary disclosed by the company, we have started small batch production of the fixed-point project of new energy vehicle wireless charging system in the second half of 2022. We are optimistic about the company's growth potential in automotive electronics layout and customer expansion in the future.
Profit forecast and valuation
Considering the increase in R & D investment in the company's new business and the uncertainty of downstream demand, we lower our 2022 net profit forecast by 3.7% to 325 million yuan, leaving the 2023 net profit forecast unchanged. The current share price corresponds to a price-to-earnings ratio of 27.8 times 2023 / 19.8 times 2023. Maintain an outperform industry rating and a target price of 18.00 yuan, corresponding to 37.9 times 2022 price-to-earnings ratio and 27.0 times 2023 price-to-earnings ratio, which has 36.1% upward space compared with the current stock price.
Risk.
The impact of the epidemic exceeded expectations; shipments of new energy vehicles in North America fell short of expectations; and Weibo continued to lose money.