Main points of investment:
Event: Weifeng electronic announcement semi-annual report of 2023, 23H1 achieved operating income of 243 million yuan, an increase of 9.5% over the same period last year; net profit of 74.62 million yuan, an increase of 49.8% over the same period last year. Of this total, the operating income of single Q2 was 128 million yuan, an increase of 7.3% over the same period last year, and the net profit of returning home was 26.99 million yuan, up 1.5% from the same period last year. In addition, the company announced that it intends to invest no more than 15 million US dollars in the construction of a production base in Thailand.
The performance is in line with expectations, and the automotive and new energy business has achieved steady growth under the background of strong macro uncertainty. In terms of business segment, the revenue of 2023H1's connector products in the three major lower reaches of industrial control / automobile / new energy is RMB 1.57 billion, an increase of 2.2%, 31.8%, 23.9%, and about 65%, 17%, 16%, respectively.
It is expected that with the continued localization of automotive connectors, this field will become an important direction of the company and maintain high growth. Shipments of 23H1's entire vehicle factory customers BYD, Tier1 customers Yi Control Power, Ambofu and other customers have all achieved positive year-on-year growth.
The gross profit margin is stable and high, the domestic substitution continues, and the space is broad and steady. 23H1's gross profit margin remains at a high level of 42.3%, reflecting the company's specialization in high-end precision connectors, high barriers and anti-risk ability. The company has more than 20 years of connector research and development, design, production and sales experience, products are sold to China and Europe, the United States, Japan, South Korea and other parts of the world. At the same time, the company has maintained good cooperative relations with Huichuan Technology, BYD, Sunshine Power supply, Delta Electronics, Amboft and other well-known enterprises at home and abroad.
In addition, the company announced that it intends to invest no more than 15 million US dollars in the construction of a production base in Thailand. The establishment of overseas factories is conducive to further expanding international business and improving the industrial layout. At present, the production capacity is mainly in Dongguan and Kunshan. As of 23H1, the company has 1.33 billion yuan in currency on its account, and the capital is abundant. We believe that building overseas factories is not only an important guarantee for international customers, but also an effective way to disperse business risks in the current complex international situation.
Maintain earnings forecasts and maintain "buy" ratings. To maintain the profit forecast, the company is expected to return to the mother of the net profit of 176pm 258m in 23-25, the current share price is corresponding to PE in 30-23-20, the valuation is at an all-time low, and the "buy" rating is maintained.
Risk hint: international macroeconomic and political situation fluctuation risk, industry competition aggravation risk, raw material price fluctuation risk.