Event: the company released its semi-annual report for 2023. During the reporting period, the company realized operating income of about 980 million yuan, down 29.59% from the same period last year. The net profit belonging to shareholders of listed companies was about 223 million yuan, down 54.12% from the same period last year. The net cash flow from operating activities was about 19.7 million yuan, down 70.69% from the same period last year.
Main points of investment
In the first half of 2023, the company's performance declined mainly due to the decline in downstream demand, and is expected to recover in the medium to long term. In the first half of the year, the downstream market of the electronic components industry in which the company is located is in the doldrums, and the recovery of customer demand is slow, resulting in a decline in sales of the company's core products, ceramic dielectric capacitors, as well as a decline in agency business, and the company's operating revenue decreased by 29.59% compared with the same period last year. In spite of this, the company has actively invested in new business areas, including microwave modules, microcontrollers, microprocessors and ceramic circuit boards, increased R & D and talent introduction, increased the number of employees and maintained stable compensation, but overall labor costs rose. The company's net profit fell by 54.12%, and the net cash flow from operating activities decreased by 70.69%. In the medium and long term, the company has the ability to iron out the fluctuation of short-term revenue and profit decline.
Pay attention to research and development and marketing, the core competitiveness is obvious. Since its inception, the company has carried out the construction and implementation of quality management system and quality assurance system in strict accordance with international quality management standards and user requirements; the company has set up research and development technology platforms such as technical research and development centers, postdoctoral research workstations, laboratories accredited by China National Accreditation Committee for conformity Assessment (CNAS) and a number of joint laboratories. The company insists on ploughing deeply in the field of ceramic capacitors, and has mastered a full set of technologies from the preparation of ceramic powder to the production of ceramic capacitors, forming a series of core technologies for the production of ceramic capacitors from material development, product design, production process to reliability guarantee, etc. The company continues to provide highly reliable products for self-produced business customers, accumulating a large number of customer resources and excellent customer structure.
Deepen the industrial layout, actively invest in R & D, and the business structure is stable. As of 2023H1, the company established Hongyuan Innovation Research Institute as a platform for scientific and technological innovation, with continuous R & D investment, focusing on serial R & D and market expansion of ceramic capacitors, filters, microwave modules, microcontrollers and microprocessors, ceramic circuit boards, ceramic shells and other products. The income of the top five customers of the company's self-produced business reached 402 million yuan, down 34.19% from the same period last year, but the company still maintains a good and stable cooperative relationship with customers by virtue of stable and reliable product quality and professional and comprehensive sales services. At the same time, the company's agent business development of new energy vehicles, high-voltage frequency converters and other areas of customer demand is growing rapidly, is expected to become a new growth point.
Profit forecast and investment rating: taking into account the pace of downstream equipment volume, we adjusted the 2023-2025 net profit to 9.07 (- 0.85) / 11.21 (- 0.85) / 1.285 (- 0.87) billion, corresponding to PE is 15-12-11 times, maintaining the "buy" rating.
Risk tips: 1) downstream demand and order fluctuations; 2) corporate earnings are lower than expected; 3) market systemic risk.