Incidents:
On April 21, the company released its report for the first quarter of 2023, achieving revenue of 174 million yuan, a decrease of 0.39% over the previous year, net profit of 24 million yuan, an increase of 40.14% over the previous year, after deducting net profit of 20 million yuan from non-return mothers, an increase of 25.22% over the previous year.
Comment:
Revenue showed resilience, and profits were released steadily. The company achieved revenue of 929 million yuan in 2022, an increase of 58.90% over the previous year, and Guimu's net profit was 123 million yuan, an increase of 62.09% over the previous year. Among them, 22Q4 achieved revenue of 296 million yuan in a single quarter, an increase of 53.36% over the previous year, and achieved net profit of 0.4 billion yuan, an increase of 54.06% over the previous year. Beginning in the second half of 2022, downstream consumption sentiment declined, compounded by the spread of the epidemic, and industry demand was affected. The company's 22Q3 and 22Q4 revenue increased 64.55% and 53.36%, respectively, and Guimu's net profit increased 52.31% and 54.06%, respectively. The performance was extremely resilient. The company's products cover the four major fields of new energy, integrated circuits, smart terminals and high-end equipment. Although Q1 2023 is still in the demand recovery stage, the company's revenue has remained stable.
In 23Q1, the company's sales/management/R&D/financial expenses ratio was 5.63%/7.26%/5.69%/-2.60% respectively, up 0.2/1.4/1.3/-3.2pct respectively over the previous year. Although the increase in the company's financial and financial management benefits led to a significant increase in the net profit of Fumo, net profit performance remained stable after deducting Fumo's net profit.
The new energy business is developing rapidly, and the integrated circuit business is rapidly replacing domestic production. Thanks to its leading edge in product technology, the company maintained a high market share in the fields of power battery packaging materials and photovoltaic supercrystalline materials in 2022, while actively expanding the fields of energy storage batteries and consumer batteries. It is expected that the new energy business will continue to develop rapidly this year.
At the same time, the company has completed and put into operation a power battery packaging material production line with an annual output of 8,800 tons in Kunshan, which strongly guarantees the delivery of packaging materials orders for new energy power batteries. In the field of integrated circuit packaging, the company seizes domestic substitution opportunities, increases investment in R&D, and continues to promote the introduction of new products for many key customers such as design and testing. It is expected that the company's integrated circuit business will enter a period of rapid development this year, driving the company's overall performance to soar.
Established Depon International to expand overseas business. In order to further optimize the strategic layout and expand overseas market business, the company plans to invest no more than 1.5 million US dollars abroad to establish a new wholly-owned subsidiary, Debon Technology International Co., Ltd. in Singapore, and plans to establish Sun Company in Vietnam as an investor. Accelerating the company's overseas business layout will effectively help the company achieve an international strategic layout and enhance the company's brand competitiveness.
Maintain a “buy” rating. We are optimistic that the company will maintain a high increase in its new energy business after the release of production capacity. At the same time, in the context of localization, it will accelerate the introduction of integrated circuit products and achieve rapid growth in performance. The company's revenue for 2023-2025 is estimated to be 1,362/18.29/2,306 million yuan respectively, and Guimu's net profit is 182/255/379 million yuan respectively.
Risk warning: downstream demand falls short of expectations, profit and valuation falls short of expectations, new product verification falls short of expectations