[investment points]
Committed to building an internationally competitive provider of electronic components and solutions. The company's early supporting Foxconn to develop precision metal structures, mainly used in iPhone, iPad and so on.
In recent years, the company has seized the development opportunities of the times and major customers, actively laid out the game machine parts business, and successively developed core components, including slide rails, precision positioning controllers, and at the same time, vigorously expand optical communication related product solutions. At present, it has formed a diversified product solution matrix, including unique game console parts, VR/AR parts, connectors, optical communication solutions and automation equipment.
Long-term cooperation with international giants, deeply ploughing the field of game machine parts. As the core supplier of N company's game console slides and other parts, the company is expected to continue to benefit. In addition, the company's precision positioning controller (Joy-stick) is currently mainly used in Meta's Oculus series VR/AR products. Apple Inc will release Vision Pro in June 2023, which is expected to lead the new growth of the global VR/AR market.
Forward-looking layout of optical fiber connectors to take advantage of the development of the AI era. In the field of optical fiber connectors, the company has established long-term cooperative relations with customers such as SENKO and special messages, and the business scale of high-end products such as multi-core MPO optical fiber jumpers has increased rapidly. In addition, the company has further enhanced its service capability in the field of optical communication products by taking a stake in Fuke Sima. With the continuous development of the global AI model and the hot construction of data centers, the demand for supporting solutions for optical communication is expected to continue to increase.
[investment advice]
It is estimated that the company's revenue from 2023 to 2025 will be 791 million yuan, and the net profit will be 1.21 billion yuan. We refer to the average valuation of comparable companies in the field of smart hardware and optical communications, and considering the uniqueness of the company's business, we give the company a "buy" rating of 1.70 times PEG in 2024, corresponding to a 12-month target price of 73.38 yuan.
[risk Tip]
Downstream demand is lower than expected
The progress of production expansion is lower than expected
The progress of product development and introduction is lower than expected