Events:
On July 15, 2023, the company issued a half-year performance forecast for 2023. It is estimated that the half-year net profit of 2023 will be 55 million yuan to 78 million yuan, down 56.54% to 69.36% compared with the same period last year; the net profit of non-return is expected to be deducted from 49 million yuan to 72 million yuan, down 39.76% to 59.00% over the same period last year; and the basic earnings per share is expected to be 0.32% to 0.46% per share.
Due to the short-term pressure on performance affected by order delays, Q2 quarter-on-quarter has improved significantly:
In the first half of 2023, the production base set up by the company's photovoltaic support business in the United States was under construction, which failed to release, resulting in the postponement of orders from American customers; at the same time, the non-recurrent profit and loss of 73.7242 million yuan resulting from the sale of shares in the same period last year led to a high base. In the first half of 2023, the company is expected to achieve a net profit of 55 million yuan to 78 million yuan, a decrease of 56.54% to 69.36% compared with the same period last year, and an estimated deduction of 49 million yuan to 72 million yuan for non-return net profit, down 39.76% to 59.00% over the same period last year. Among them, Q2 is expected to achieve a net profit of 39.4 million yuan to 62.41 million yuan in a single quarter, down 53.63% and 70.72% compared with the same period last year; an increase of 153%, 300%, and a significant improvement.
Photovoltaic bracket business binds core customers in the United States:
The company has long been committed to the research and development, production and sales of the core components of the photovoltaic bracket, and has won a good reputation among customers in the international market, and shipments have achieved sustained and steady growth, its core customer is the global photovoltaic system leading manufacturer NEXTracker, photovoltaic tracking bracket ranked first in the field, GameChangeSolar, FTC, Trina Solar and Zhengtai Anergy are also important customers of the company. At the same time, the company distributes the domestic market through Tianjin subsidiaries. According to the company's announcement, Tianjin Shengwei's operating income in the first quarter of 2023 was 12.39 million, an increase of 320% over the same period last year. Through the establishment of subsidiaries with downstream customers to strengthen customer binding, the company is expected to begin to increase volume in the second half of the year to contribute to the company's performance.
A small number of domestic high-speed connector mass production enterprises, actively layout optical module business:
The company takes the communication connector as the core, the consumer electronics connector as the important composition, and the automobile and other connectors as the extension as the development strategy at this stage. At present, the company is one of the few domestic enterprises to achieve mass production of high-speed connectors, and has established long-term cooperative relations with many high-quality customers, including Huawei, ZTE, Foxconn, Pegatron, Duratel and so on.
High-speed communication connectors represented by SFP series and optical interconnection products, as the basic components of 5G, FTTx (optical fiber access), cloud computing, data center and so on, will usher in greater growth space and development prospects with the development of downstream industries and technologies. The company's automobile connector business achieved an operating income of 134.09 million yuan and a net profit of 18.73 million yuan in 2022, an obvious growth rate compared with 2021. At the same time, Wuhan Yigu Optoelectronics, a subsidiary of the company, mainly produces 400G and below optical modules, while 800G optical modules are in the stage of development and design. According to the company announcement, the sales volume of the company's optical module business is about 5 million yuan in the first quarter of 2023.
Investment advice:
The company has more than 20 years of experience in communication connector research and development, and has expanded the photovoltaic bracket business. we estimate that the company's operating income from 2023 to 2025 will be 52.60max 61.87 / 7.534 billion yuan, an increase of 5.0%, 17.6%, 21.8%, and net profit of 2.68%, 36423 million yuan, an increase of 11.7%, 35.8%, 43.7%, respectively. The corresponding EPS is 1.57 + 2.13 + 3.06 yuan respectively. We give the company 23.5 times PE in 2024, corresponding to the target price of 50.06 yuan, and maintain the "buy-A" investment rating.
Risk hints: increased market competition, lower-than-expected market demand, lower-than-expected new technology research and development and new product development, raw material price fluctuations, exchange rate fluctuations