Company releases 2022 results KuaiBao expects homecoming net profit to decline 14.4% compared with the same period last year KuaiBao, business income is expected to increase 26.7% to 950 million yuan, homed net profit decreases 14.4% to 94 million yuan; based on this, we estimate that during the 4Q22 period, the company's operating income increased by 20.8% to 250 million yuan, and homed net profit decreased by 79.8% to 4.34 million yuan. Due to the high customer concentration in lithium power and photovoltaic industries, and the company's price adjustment during the market breakthrough, superimposed the impact of its own product replacement and increased investment in the market, research and development, the overall performance of the company in 2022 is not as good as we expected.

Pay attention to the main points

Revenue side: servo / PLC/ industrial robot category extension + lithium power, photovoltaic output company revenue side ushered in a sustained high growth, with an increase of 27% in 2022 compared with the same period last year. In 2022, the industrial control market showed differentiated growth. According to MIR data, only the downstream of battery equipment grew by 20% compared with the same period last year, while most other industries declined to varying degrees, so the company clung to high-profile tracks such as lithium power and photovoltaic, and we expect revenue to account for about 50%. According to MIR data, the company's servo market share in 2022 was about 3.4%, increasing 0.54ppt compared with the same period last year, ranking second in China. In addition, the company added the PLC layout in 2022, and the revenue side has a certain volume; and at the end of 22, the company released the RHS1 series SCARA industrial robot developed by the core components. Looking forward, we believe that the growth rate of new energy will still lead in 2023, and the company's line A layout will be high, and line B will layout the traditional track, superimposing the continuous release of new products. We are optimistic that the company will continue to realize its operating alpha in category expansion and industry expansion.

Profit end: the company's gross profit margin is under short-term pressure, 4Q22 increases R & D and market investment, and is optimistic about the profit flexibility after the switching of new products. Due to the high concentration of downstream customers, the company has adjusted the price in order to accelerate the introduction of customers, we expect the company's 4Q22 gross profit margin to decline slightly compared with the same period last year. In addition, considering that the company continues to enrich the product matrix and dealer system during the 4Q22 period, the company's R & D and sales expense rate has still improved. Considering that the company has not yet switched all its new products in 2022, we expect the company's gross profit margin to be repaired as the company's product switching process accelerates in 2023.

Profit forecast and valuation

Due to the adjustment of product prices in 2022 to accelerate the introduction of products in lithium electricity, photovoltaic and other fields, and the pressure on the cost of raw materials in 2022, and the pressure on the company's gross profit margin, we cut our net profit in 2022 by 35.8% to 94 million yuan. at the same time, the net profit in 2023 was reduced by 12.5% to 220 million yuan, and the net profit forecast of 310 million yuan in 2024 was introduced. The current share price corresponds to the 24-year price-to-earnings ratio of 2023 31.1x/22.2x. Considering that the valuation center of the sector has been revised down recently, we have lowered the company's target price by 22.6% to 60 yuan, corresponding to the 24-year 41x/29x price-to-earnings ratio of 2023, which still has 32.1% room to rise compared with the current stock price.

Risk

Industry competition intensifies, new industry expansion falls short of expectations, new product development falls short of expectations, and cash flow is not expected.