Event
Recently, the company released its semi-annual report for 2023, with operating income of 980 million, down 29.59% from the same period last year, and net profit of 223 million, down 54.12% from the same period last year.
Comment
1. The prosperity of the downstream market of the electronic components industry is weak, and both self-produced business and agency business have declined. In the first half of the year, the operating income of the company's self-produced business reached 566 million, down 31.31% from the same period last year. Among them, the revenue of ceramic capacitors in the self-produced business was 502 million, down 36.89% from the same period last year, mainly due to weak customer demand for the company's core products, ceramic dielectric capacitors. The agency business achieved operating revenue of 412 million, down 26.88% from the same period last year, of which the income of the top five customers was 233 million, down 40.30% from the same period last year. This is mainly due to the fact that some core customers are greatly affected by the external market, and their expectations for future demand continue to decrease. Reduce the procurement of electronic components, while the company's expansion of new energy vehicles, high-voltage frequency converter and other areas of customer demand growth is rapid. However, it is difficult to make up for the reduced demand of some core customers in the short term.
2. Continuous R & D investment to enrich product categories. The company continues to pay attention to R & D investment. in the first half of the year, the company's R & D expenditure reached 47.1 million yuan, accounting for 8.31% of self-produced business income, an increase of 2.27% over the same period last year. In the field of high reliability, the company mainly focuses on ceramic capacitors and ceramic materials, filters, microwave modules, microcontrollers and microprocessors, ceramic circuit boards, ceramic shell and other electronic components, among which the revenue of microwave modules, microprocessors and other electronic components introduced by the company has increased significantly, and sales have increased rapidly from 15.89 million in the same period last year to 51.7 million in the first half of this year.
3. We believe that the company is currently in a trough in the industry, and with the mid-term adjustment of the 14th five-year Plan, the company's orders are expected to usher in a new round of peak. The inflection point of the company's performance is expected to come in the third and fourth quarters of this year. We expect the company's homing net profit from 2023 to 2025 to be 6.30,8.77 and 1.061 billion yuan respectively, an increase of-22%, 39% and 21% respectively over the same period last year. The corresponding share price PE is 23,17 and 14 times respectively, covering for the first time and giving a "buy" rating.
Risk Tips:
The peak intensity of the new round of orders is lower than expected; the drop in product prices is greater than expected; and business expansion is not as expected.