Incident: On the evening of April 14, the company released the 2022 annual report and the report for the first quarter of 2023. In 2022, it achieved total revenue of 642 million yuan, YoY -3.80%; gross profit margin of 37.02%, down 4.97 pct from the previous year; Guimo's net profit was 118 million yuan, YoY -9.94%, after deducting non-homo net profit of 76 million yuan, YoY -30.08%; operating income and Guimo's net profit were under short-term pressure. The first quarter of 2023 achieved revenue of 155 million yuan, YoY +9.94%; net profit of the mother was 16 million yuan, YoY -32.46%; after deducting net profit of the non-return mother was 0.07 million yuan, YoY -45.75%.
Comment: Performance is under pressure in the short term. Gross margin declined due to rising raw material prices in overseas markets. Investment in research and development increased for thin-film lithium niobate high-speed modulator chips and lidar light source modules.
The company achieved revenue of 149 million yuan in the single quarter of 202Q4, YoY -17.77%; the net profit of the mother was 28 million yuan, and YoY -16.37%. On the cost side, the company invested 100 million yuan in R&D in 2022, YoY +29.22%, mainly due to the company's R&D investment in thin-film lithium niobate high-speed modulator chips, autonomous lidar light source modules, and 400G/800G high-speed microoptical integrated devices.
5G and cloud computing have led to rapid growth in the optical communication device business, and the price of the fiber laser business has declined due to industry demand and competitive factors. The company's optical communication device business grew steadily in 2022, achieving revenue of 218 million yuan, YoY +29.57%. The company continued to increase R&D investment in optical communication products during the reporting period, focusing on developing products such as undersea optical network fiber feeders and MXN high-precision multi-dimensional optical fiber arrays related to OXC equipment, while increasing production and sales of optical communication active devices. The fiber laser business achieved revenue of 343 million yuan in 2022, YoY -3.80%, mainly due to insufficient demand in the downstream industrial laser industry and the decline in fiber laser device prices due to competition in the domestic market.
High-speed thin-film lithium niobate modulators are progressing steadily, and mass production of lidar light source modules has been achieved. The company completed small-batch production of next-generation high-speed modulator chips and modules during the reporting period of the company's lithium niobate modulator business, while actively building an integrated product process development platform; the company completed mass production of lidar light source modules in the lidar field and continued to advance in the field of autonomous driving.
Profit forecast and investment advice: Optical Library Technology is a scarce supplier of advanced optical devices in China. We are optimistic that the company will continue to increase its market share in the field of fiber lasers and optical communication devices under the impetus of the AIGC wave, and achieve breakthroughs and rapid growth in the fields of thin-film lithium niobate and lidar. The company is expected to achieve revenue of 772/9.61/1,250 million yuan in 2023-2025, and net profit of 152/200/264 million yuan, corresponding to EPS of 0.93/1.22/1.61 yuan, maintaining the “increase in holdings” rating.
Risk warning: the risk of rising upstream raw material prices, increased market competition, and technological upgrading.