Event: On August 21, 2023, the company released its 2023 semi-annual report. During the reporting period, the company achieved operating income of 5.024 billion yuan, a year-on-year decrease of 19.20%, and net profit attributable to parent companies of 582 million yuan, an increase of 3.28% over the previous year. Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 545 million yuan, an increase of 2.89% over the previous year.
Profits have increased slightly, and investment in R&D has continued to increase. During the reporting period, in the first half of 2023, the company achieved operating income of 5.024 billion yuan, a year-on-year decrease of 19.20%, and net profit attributable to parent companies of 582 million yuan, an increase of 3.28% over the previous year. Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 545 million yuan, an increase of 2.89% over the previous year. The company adheres to the “specialization, refinement and innovation” product strategy, consolidates the construction of the “three major capabilities”, accelerates the construction of a technology research center, and continues to increase investment in R&D. During the reporting period, the company's R&D investment was 300 million yuan, an increase of 26.60% over the same period last year.
Perceive that the business is growing rapidly and orders are plentiful. The company's sensor business revenue for the first half of the year was 1,461 million yuan, an increase of 45.31% over the previous year. High-value-added products such as PTC heaters, automotive temperature sensors, and various photoelectric sensors made breakthroughs.
The core technology of the company's PTC heating chip manufacturing and packaging process. Competitors in related fields mainly come from Germany, Japan, and South Korea. In response to the demand for fast battery charging for new energy vehicles, the company has developed PTC chips suitable for high voltages. At present, annual orders for PTC thermal management system products are around 3 billion yuan. The world's largest production base for PTC thermal management systems for new energy vehicles has been built. Daily production capacity has been greatly increased. 7 types of mature product lines, including PTC heaters, temperature, humidity, light, rainfall, dust, and pressure, have made gains in new projects for automobile customers such as BYD, NIO, and Aian.
Optical modules gradually broke through, and small stations were dragged down by demand and fell short of expectations. Linked business revenue was 1,837 million yuan, a year-on-year decrease of 43.74%. Among them, the decline in small station business revenue is mainly due to operators lagging behind in 5G construction, and terminal applications not picking up.
In terms of optical modules, at present, the company's 800G products have been sent to customers in North America one after another before and after the OFC exhibition. All series of optical modules of 400G and below have been delivered in batches. Autonomous optical chips up to 56G have formed comprehensive mass production and support, and are being jointly developed and evolved in small batches around the 112G single channel. On the domestic side, demand for 400G and 800G has increased markedly. 800G optical module products have been laid out around leading domestic Internet customers, and domestic and Southeast Asian production capacity construction has been accelerated.
Laser's overseas expansion is smooth, and key products continue to grow. The laser business focuses on key industries such as new energy, construction machinery, rail transit, and ships, and is vigorously developing domestic and foreign markets. Currently, in addition to traditional North America and Europe, the Central American business and the five Central Asian countries are also developing. The traditional low-power laser business has declined due to the influence of the 3C industry, but the high power contribution represented by the 3D five-axis has increased. The 3D five-axis cutting machine can be widely used in the fields of automobiles, continuing engineering, and ships and bridges. Currently, the company's sales volume of this product continues to grow, and orders are sufficient. Furthermore, the company relies on the intelligent manufacturing business to focus on the digital transformation requirements of factories to lay out integrated solutions for intelligent equipment, production line automation, and factory intelligence. It has now set an industry benchmark for customers.
Investment suggestions: We believe that the sensing business and intelligent equipment business will continue to contribute to the company's revenue, and the optical module business will open up space for the company. Maintain the profit forecast and predict that the company's revenue for 2023-2025 will be 150.38/ 186.77/ 23.80%, up 25.20%/24.20%/23.80%, and the company's net profit will be 1,240/ 15.98/2,025 billion yuan respectively, up 36.90%/28.80%/26.70%, corresponding to EPS 1.23/ 1.59/ 2.01 yuan, PE 25.60/ 19.90/ 15.70, maintaining the “holdings increase-B” rating.
Risk warning: New product development falls short of expectations; market competition continues to intensify; accounts receivable collection is not timely.