This report is read as follows:
The company's 1H23 performance has exceeded expectations driven by markets such as automotive electronics, and the company is deep in the field of XR micro-transmission and has a leading edge, which is expected to fully benefit from the high growth of the XR industry in the future.
Main points of investment:
Maintain the "overweight" rating and maintain the target price of 91.0 yuan. At present, the micro-transmission and micro-drive industries are accelerating their penetration in the automotive, medical, communications, XR and other industries, maintaining the company's EPS 1.27max 1.82max 3.77 yuan in 2023-2025. Considering that the company fully benefited from the explosive growth of the XR industry, it gave the company 50x PE in 2024, maintaining the target price of 91.0yuan and maintaining the "overweight" rating.
2Q23 performance increased year-on-year compared with the same period last year, and the automotive electronics sector contributed to higher-than-expected growth. 1H23 Company's performance exceeded expectations, achieving operating income of 504 million yuan, YoY+7.42%, net profit of 73 million yuan, YoY+32.03%, deducting non-home net profit of 48 million yuan, YoY+20.13%, performance exceeding expectations mainly from automotive electronics and other fields, in which 1H23 achieved revenue of 255 million yuan and YoY+60.54%. From a quarterly point of view, 2Q23 achieved operating income of 282 million yuan, YoY+11.02%,QoQ+27.03%, return net profit of 44 million yuan, YoY+37.34%,QoQ+57.14%, deducting non-return net profit of 31 million yuan, YoY+62.73%, QoQ+72.22%,2Q23 performance exceeded expectations.
XR products inject new momentum of growth, and major customers in North America are expected to drive high performance growth. The company deeply ploughs the micro-transmission and micro-drive industry and has a leading advantage. Micro-transmission products can be used in the field of AR/VR, such as magnetic induction system, pupil distance adjustment drive system, head automatic loosening device, smart glasses hidden miniature loudspeaker and so on. According to IDC's forecast, global AR/VR equipment shipments will grow by 31.5% year-on-year in 2023, will maintain more than 30% growth in the future, and will reach 35.1 million units by 2026. The company is expected to benefit deeply and usher in high performance growth.
Catalyst. Benchmark products in XR field are on sale; orders for IPD adjustment module are higher than expected.
Risk hint. The downstream demand is lower than expected; the progress of the company's new product research and development is not as expected.