Incidents:
On February 28, the company released its 2022 annual performance report, achieving operating revenue of 839 million yuan, an increase of 47.69% over the previous year. Guimu achieved net profit of 168 million yuan, an increase of 53.96% over the previous year. Net profit after deducting non-return to the mother was 158 million yuan, an increase of 59.06% over the previous year.
Comment:
The company's revenue and profit grew in high quality in 2022. Although the growth rate of the world economy slowed in 2022 and the impact of the COVID-19 pandemic continued, in the face of downward economic pressure, the company's net profit increased by more than 59 million yuan compared to the same period last year, and the net profit margin remained stable at around 20% for 6 consecutive years from 2017 to 2022.
The company's main customers include Tyco Electronics, Amphenol, and Moss, which have occupied the top three global connector market shares for many years, and China Aviation Optoelectronics, a well-known domestic connector listed company. Through binding with leading companies in the industry, the company has sufficient orders. The company actively broadens its product line and continues to explore new business growth points from existing customers. Furthermore, through R&D, the company helps products continue to be iteratively upgraded, increases product value, achieves sharp increases in volume and price, and ultimately achieves high-quality growth in revenue and profits.
Actively tap overseas market demand and establish a new base for global development. The company's board of directors took a solid step forward in its global layout by adopting a resolution to establish a wholly-owned subsidiary in Malaysia in July 2022. The layout of overseas subsidiaries can not only become a bridgehead for the company to further expand new overseas markets and tap new overseas customers, prevent international tension from having a major impact on the company's business to a certain extent, but also expand production capacity to better cope with the growth in market demand.
Vehicle products continue to be sold, leading new growth through accumulation and scarcity. Although the proportion of the company's in-vehicle business is currently small compared to the communication business, with the rise of smart cars, the company has already set up the automotive sector ahead of schedule, developed new customers, and developed new products. Major customers of the company's automotive products include Halbach, Moss, and Tyco Electronics. In addition, the company has also established cooperation with companies such as BYD, Phoenix Electric, Nandu Power, and Honeycomb Energy. Among them, many products developed by the company in cooperation with BYD have been certified, and automotive connector products will continue to be released.
First coverage, giving a “buy” rating. We are optimistic about the company's core competitiveness in precision manufacturing in the field of communication connectors and the investment opportunities brought about by the intelligent electrification of automobiles. It is estimated that in 2022-2024, the company will achieve revenue of 838/1,204/1,701 million yuan respectively, and the net profit of the mother is 168/217/302 million yuan respectively, and the corresponding PE is 36.86/28.52/20.51 times, respectively.
Risk warning: demand development in overseas markets fell short of expectations, and the volume of automotive products fell short of expectations