Event: The company released its semi-annual report for 2023. In the first half of '23, the company achieved operating income of 504 million yuan, +7.42% year on year; realized net profit of 73 million yuan, +32.03% year on year. Among them, Q2 achieved revenue of 282 million yuan, +11.00% year on year, and +26.76% month on month; realized net profit of 44 million yuan, +37.34% year on year, and +57.42% month on month.
The company's overall profitability increased slightly in the first half of '23. As revenue from automotive electronics products with high gross margins increased, the company's profitability increased slightly. In '23, H1's comprehensive gross margin was 28.04%, year on year +0.48 pct; the company's net profit margin was 14.44%, year on year +2.69 pct. Among them, Q2 gross profit margin and net margin were 28.77%/15.79% respectively, +0.48 pct/+3.02 pct year on year, +1.65 pct/+3.07 pct.
The application of automotive electronics products continues to expand, and we are optimistic that it will maintain rapid growth in the second half of the year. In the field of automotive electronics, it achieved revenue of 255 million yuan, +60.54% year-on-year. The company is seizing the new opportunities brought by the rise of independent automobile brands and the electrification and intelligence of automobiles, focusing on emerging, incremental, and technologically demanding applications, and providing solutions, such as in-vehicle sports screens and car hidden door handles, and is expected to maintain rapid development in the second half of the year. In the field of smart medical care, it achieved revenue of 26.26 million yuan, compared to -9.55%. The company's products such as staplers and micropumps were promoted and used. In the smart home sector and communications sector, the company achieved revenue of 100/073 million yuan, respectively, -19.10%/-32.10% over the same period last year.
Continue to expand downstream product applications, and are optimistic about the application prospects of the company's products in the XR field. The projects and fields in which the company is participating are also constantly expanding. New applications for downstream customers, such as vision correction drive systems, lawn mowing robot walking actuator drive systems, and pool cleaning robot drive systems, continue to emerge, designing “gearbox+motor+control” industry solutions for customers in different fields. The company actively lays out the XR field. Its micro transmission systems can be used in scenarios such as pupil distance adjustment drive systems, automatic head tightening devices, magnetic sensing systems, and hidden micro speakers for smart glasses.
Investment suggestions: Estimated net profit for 23-25 to be 200/2.90/396 million yuan, +33.2%/+44.5%/+36.9% YoY, corresponding PE is 59.5/41.2/30.1, maintaining the “buy” rating.
Risk warning: raw material prices fluctuate; new product expansion falls short of expectations; consumer market recovery falls short of expectations.