Incidents: The company released its 2022 annual report and the first quarter report of 2023 on April 25. It achieved revenue of 1,106 billion yuan in 2022, a decrease of 21.62 percent over the previous year; the net profit of the mother was 228 million yuan, a decrease of 60.45% over the previous year; after deducting non-net profit of 204 million yuan, a decrease of 56.75% over the previous year. Q1 of 2023 achieved revenue of 223 million yuan, down 26.85% from the previous year and 3.17% from the previous year; the net profit of the mother was 29 million yuan, down 68.92% from the previous year, up 305.73% from the previous month; after deducting non-net profit of 20 million yuan, a decrease of 75.84% from the previous year, an increase of 107.24% over the previous year.
Revenue continued to be under pressure in the first quarter, and profitability improved month-on-month: In 2022, due to multiple factors such as falling market demand, high industry inventories, and insufficient innovation in consumer electronics products such as mobile phones, the image sensor segment that the company focused on was weak, and business scale and profitability were under pressure in the short term. The company's gross margin in 2022 was 44.15%, down 8.13pct from the previous year; the net profit margin was 21.05%, down 19.96pct from the previous year. The gross margin for Q1 2023 was 36.22%, down 15.17 pct year on year and 0.54 pct on month; net interest rate was 13.66%, down 16.95 pct year on year, up 10.17 pct from month on month. Profitability improved significantly in the first quarter. In terms of expenses, the Q1 sales, management, R&D, and finance expense ratios were 0.90%/7.68%/14.74%/-0.74%, respectively, and the month-on-month changes were 0.20/3.20/-9.87/9.82 pct, respectively.
Automobile CIS applications have shown significant growth, opening up room for long-term performance growth: under the strong impetus of intelligent connected vehicles and autonomous driving, global automotive CIS market demand continues to rise, and the number and value of cameras equipped with bicycles has increased significantly. According to Jiwei Consulting, the CIS market size of the global automotive electronics industry will grow to US$3.27 billion by 2025, with a compound annual growth rate of 14.3%. The company is a global leader in CIS chip sealing and testing. In response to performance improvement needs in the field of automotive electronics applications, the company is vigorously promoting the development and innovation of the vehicle regulation stack packaging process, increasing the scale of mass production, and continuously improving the company's technological leadership and business scale in the automotive CIS field. As market demand increases, the company's automotive CIS business is expected to grow rapidly.
Joining hands with Anteryon to deepen technological collaboration and innovation, the micro optical device business is beginning to take shape: the company recently announced that Jingfang Optoelectronics will invest 2.7 million euros to purchase 6.61% of Anteryon's shares in the Netherlands. The company continues to integrate the design, R&D and manufacturing capabilities of Anteryon and Jingfang Optoelectronics in the Netherlands to expand the scale of mass production and commercial applications. Thanks to the increase in market demand for semiconductor equipment, intelligent manufacturing, agricultural automation, etc., the hybrid lens business continues to grow steadily and its profitability continues to increase. At the same time, the company is actively developing wafer-level optical devices (WLO) technology development and market expansion. Anteryon has experience in wafer-level optical component manufacturing and mass production. Through this acquisition, the company has further deepened collaborative innovation in business technology, process level and mass production capacity have continued to increase. The commercialization scale of related products in the field of intelligent automotive interaction has increased significantly, which is expected to help the scale of revenue continue to expand.
Maintaining the “buy” rating: The company is a domestic CIS testing leader, leading wafer-level chip size packaging technology and scale. We are optimistic that downstream demand for the company's sensor packaging business will blossom more, the application of WLCSP technology will gradually expand, and WLO technology integration will go smoothly. The company's net profit for 2023-2025 is estimated to be 431 million yuan, 535 million yuan, and 679 million yuan respectively, EPS is 0.66, 0.82, and 1.04 yuan respectively, and PE is 37X, 30X, and 23X respectively, maintaining the “buy” rating.
Risk warning: Market competition risk; technological breakthroughs fall short of expectations; in-vehicle CIS penetration rate falls short of expectations; consumer electronics demand recovery falls short of expectations.