Incident: On April 12, 2023, the company released its 2022 annual report. It achieved revenue of 2.2 billion yuan in 2022, an increase of 55.36% over the previous year; net profit attributable to shareholders of listed companies was 150 million yuan, an increase of 66.85% over the previous year.

The scale and profit of the distribution business have both increased. In 2022, the scale of the company's electronic component distribution business continued to expand, covering the four major market segments of automotive lighting, car cockpits, automotive passive components, and automotive wire-controlled chassis. Based on its rich customer resource advantages, it promoted new products, strengthened in-depth cooperation, increased the usage and value of bicycle products, and contributed to profit growth points; at the same time, it actively accelerated the deployment of the three electricity (battery, motor, electronic control) systems for new energy vehicles to improve the company's layout in the field of new energy vehicles; the acquisition of the company Yihai Nengda has gradually transformed automotive electronics from consumer electronics to boost automotive electronics revenue in '22. The device distribution business achieved revenue of 1,968 billion yuan, an increase of 47.35% over the previous year, and gross margin reached 17.86%, an increase of 1.04% over the previous year.

Self-developed ICs are growing rapidly. In the field of power management ICs, thanks to long-term expansion in the automotive electronics field, the company's automotive analog ICs have a first-mover advantage. The self-developed products have successfully passed vehicle specification certification (AEC-Q100 certification), and are loaded in batches by well-known domestic and foreign automobile manufacturers such as BYD, Geely, Great Wall, Volkswagen, NIO, etc., laying a solid foundation for the company to further open up the downstream market for self-developed and designed automotive ICs; the new LED driver IC contributed 16.9% of IC business sales, driving IC business growth; with the integration of Ou Chuang IC, product models were enriched, It will further enhance the competitiveness of the company's products; in 2022, the company's self-developed IC sales were 221 million yuan, 206.89% year on year, and gross margin reached 42.68%, up 3.45% year on year.

Accumulate automotive electronics to enrich multiple product lines. The company has been optimistic about the automotive electronics field for a long time. It has maintained close cooperative relationships with downstream customers Yanfeng Weishitong, Jinlaio, Huayu Auto, Great Wall Motor, Xingyu Auto, etc., to indirectly serve mainstream domestic and foreign car manufacturers. In 2023, it will vigorously promote the company's agents and self-developed products, expand vehicle manufacturer projects, stabilize inventory business, and expand incremental business; it will continue to increase investment in R&D, with motor driver ICs, LED driver ICs, DC-DC, LDO as the main product line, and continue to enrich products with product performance and technology according to market demand While upgrading, the company is also laying out system-level chips such as SOC and SBC to further enhance the competitiveness of products.

Profit forecast: The company's revenue for 2023-2025 is expected to be 25.5/31.0/3.55 billion yuan, and the net profit of the mother is 21/29/350 million yuan, maintaining the “recommended” rating.

Risk warning: (1) demand in the NEV market falls short of expectations; (2) the pace of customer introduction is slowing down; (3) the unattainability of profit forecasting and the inapplicability of valuation methods.