Performance was slightly lower than expected, maintaining the “buy” rating
The company released its report for the first quarter of 2023. 2023Q1 achieved revenue of 929 million yuan, an increase of 10.6% over the previous year and -8.9% over the previous year. Guimu's net profit was 231 million yuan, +13.1% year on year, -26.7% month on month, after deducting non-net profit of 230 million yuan, +19.3% year on year. We maintain our previous profit forecast. We expect net profit from 2023-2025 to be 1,340/17.81/2297 billion yuan, EPS is 5.96/7.92/10.21 yuan, and PE corresponding to the current stock price is 23.5/17.7/13.7 times. We believe that the new energy track has long slopes and heavy snow, and that the company's competitiveness is leading in the world. Farah Electronics is in a golden period of development, maintaining its “buy” rating.
Demand for photovoltaics grew rapidly, the industrial control market maintained steady growth, fluctuations in capacity utilization affected gross margin 2023Q1, and the company's revenue maintained steady growth, +10.6% year on year, mainly due to increased downstream demand for new energy vehicles, photovoltaics, etc. Among them, domestic NEV sales in the first quarter were 1,585,000 units (China Automobile Association data), +26.9% year on year, and still achieved relatively rapid growth. The company continued to actively develop large customers, and its market share is expected to increase further; PV, domestic PV installed 33.66 GW in the first quarter (National Energy Administration data), up 154.8% year-on-year. The company's photovoltaic business benefited from high demand growth in industry demand; industrial control demand is expected to remain stable; consumer demand is still slowly recovering. The gross profit margin for the first quarter was 37.65%, a slight decline from 38.43% in the fourth quarter. We expect that 2023Q1 is mainly due to fluctuations in capacity utilization. is due to the Spring Festival holiday factor. The fixed asset turnover ratio in a single quarter was 0.81 times, slightly lower than 0.97 times in the fourth quarter.
The implementation of the controlling shareholder restructuring is expected to stimulate the enthusiasm of employees
The controlling shareholder restructuring was implemented. The controlling shareholder, Xiamen Fara Development Corporation, was restructured from a collective owned enterprise into a limited liability company; at the same time, 35% of the collective net asset rights were transferred to Xiamen C&D Group Co., Ltd. based on the net assets of Xiamen Fara Development Corporation as of December 31, 2021; the remaining 65% of collective net asset rights were held by the Xiamen Fara Development Corporation's trade union committee (former Xiamen Fara Development Corporation Trade Union Committee) representing all employees of the former Xiamen Fara Development Corporation. After the restructuring, the controlling shareholder and actual controller of the company did not change, which did not affect the company's normal production and operation. However, the implementation of the restructuring is conducive to clarifying property rights and further stimulating employees' enthusiasm.
Risk warning: Risks such as demand for new energy falling short of expectations; rising prices of raw materials; slow introduction of new customers.