Events:
On August 28, the company released its semi-annual report of 2023, with revenue of 490 million yuan during the reporting period, an increase of 20.98 percent over the same period last year, and net profit of 42.0366 million yuan, up 19.49 percent over the same period last year, of which 39.2689 million yuan was deducted from non-return net profit, an increase of 18.70 percent over the same period last year.
Automobile business contributes mainly to revenue, while mobile phone business is under pressure.
The company's revenue from automotive products reached 375 million yuan in the first half of 2023, an increase of 33.25% over the same period last year, accounting for 76.44% of the total revenue, of which revenue from automotive precision connectors, components and accessories reached 354 million yuan, an increase of 35.33% over the same period last year. Revenue from automotive precision shielding and structural products reached 20.4859 million yuan, an increase of 5.27% over the same period last year. The company's revenue from mobile phone products reached 83.2177 million yuan in the first half of 2023, down 10.62% from the same period last year, of which revenue from mobile phone precision connector products reached 6.4305 million yuan, down 38.85% from the same period last year, and revenue from mobile phone precision shielding and structural products reached 76.7872 million yuan, down 7.03% from the same period last year.
Investment in R & D promotes the sustained growth of Automobile Business
The company seizes the opportunity of rapid iteration of automobile intelligent technology, lays out the field of new energy vehicles through additional investment, and at the same time actively builds advanced R & D centers, enhances innovation capabilities, and speeds up product upgrading, so as to provide a driving force for the company's automotive product sales to grow rapidly. In the first half of 2023, the company's R & D expenditure reached 31.3508 million yuan, an increase of 35.43% over the same period last year.
Earnings forecast, valuation and rating
We estimate that the operating income of the company in 2023-2025 is 1.409 million yuan, respectively, with a year-on-year growth rate of 51.45 percent, 49.97 percent, 49.47 percent, and 237 million yuan, respectively, and the year-on-year growth rate is 59.23 percent, 47.83 percent, 47.51 percent, and 0.33 percent, respectively, and the 3-year CAGR is 51.43 percent. In view of the company's outstanding technological research and development capabilities, the continuous expansion of production capacity, and the performance is expected to enter the release period, we use the PEG method for valuation.
We estimate that the company's return net profit in the next three years will be 51.43%. We will give the company 50 times PE in 2023, with a target price of 16.57 yuan, maintaining a "buy" rating.
Risk hint: downstream demand is less than expected risk, technology research and development is less than expected risk, industry competition aggravates risk.