23H1's homing net profit fell 54.12%, maintaining its "buy" rating

The company released its 2023 semi-annual report, with revenue of 980 million yuan in the reporting period, down 29.59% from the same period last year, and net profit of 223.9 million yuan, down 54.12% from the same period last year. Of this total, 23Q2 realized a net profit of 121 million yuan, down 46.54 percent from the same period last year. Due to the adjustment of the purchase plan of the customers downstream of the company's testing and testing business, and the slow recovery of the demand for the company's products, we have lowered our profit forecast. The company's 23-25 net profit is expected to be 676, 889, 1.11 billion yuan (the previous value is 927,111,342 million). The corresponding PE was as much as in 21-16-13. According to the unanimous expectation of Wind, the average PE of comparable company in 23 years is 15X. Considering that the company actively arranges new business around the upper and lower reaches of the industrial chain, it has achieved certain results, so it gives the company a 23-year PE25X, corresponding to a target price of 72.25 yuan (the previous value is 99.75 yuan), maintaining a "buy" rating.

MLCC downstream demand is weak, new business is growing rapidly.

In the first half of the year, the market in the lower reaches of the electronic components industry where the company is located is weak, the recovery of customer demand is slow, the core products under the self-produced business are highly reliable ceramic capacitors, and the sales of some products under the agency business declined. Of this total, the operating income of the self-produced business was 566 million yuan, down 31.31% from the same period last year, mainly due to weak customer demand for the company's core MLCC, resulting in a decline in sales of core products; in terms of self-produced business, MLCC product revenue was 502 million yuan, down 36.89% from the same period last year; filter revenue was 12.49 million yuan, down 2.41% from the same period last year; and income from other electronic components was 51.7 million yuan, up 225.35% from the same period last year. The agency business realized operating income of 412 million yuan, down 26.88% from the same period last year, mainly due to the fact that some core customers were greatly affected by the external market, and their expectations for future demand continued to decline, reducing the procurement of electronic components.

The overall gross profit margin has declined, and the overall expense rate has increased.

The company's overall gross profit margin in the first half of the year was 46.47%, a decrease of 8.48pct compared with the same period last year, mainly due to a greater decline in the company's self-produced business with higher gross profit margin and a decline in its share of the revenue structure.

The expense side of the company remained stable, with sales expenses of 42 million yuan, an increase of 8.35% over the same period last year, management expenses of 58.44 million yuan, an increase of 6.75% over the same period last year, and R & D expenses of 47.1 million yuan, a decrease of 5.43% over the same period last year.

The company's overall expense rate was 15.29%, an increase in 4.53pct over the same period last year.

New products have entered a period of rapid growth, and the second growth curve is gradually clear.

The company continues to deepen research and development, technology autonomy, product serialization, follow customer needs and technology development trends to conduct proactive research and development, and constantly enrich product categories, non-MLCC products have made remarkable progress, the introduction of microwave modules, microprocessors and microcontrollers and other electronic components revenue increased significantly, sales increased 9.13% of self-produced business revenue. In the civil field, high-power RF microwave ceramic capacitors and packaging shell products have been partially developed and finalized, and small batch supply has been realized.

Risk tips: self-produced business orders are not as expected, product gross profit margin fluctuation risk.