The company released its 2023 mid-year report. 2023H1 achieved revenue of 355 million yuan, yoy +42.14%, net profit of 53 million yuan, yoy +45.18%, gross profit margin of 37.80%, yoy+6.47 pct; 2023Q2, achieved revenue of 165 million yuan, yoy +23.55%, net profit of 32 million yuan, yoy +64.82%, gross profit margin of 37.10%, yoy+5.96 pct.
Changguang Aerospace also contributed to revenue and profit elasticity, when high-end grating replacement was carried out. During the reporting period, the company achieved a relatively rapid increase in revenue and profit, which mainly benefited Changguang Aerospace. 2023H1, grating sensing business receivable of 87 million yuan, yoy -9.91%, gross profit margin of 40.74%, yoy+4.08 pct. The year-on-year decline in sales revenue is related to weak demand for general grating products, while the increase in gross margin mainly benefits from the increase in high-end grating sales volume and sales, and implementation of domestic substitution logic; the optoelectronic measurement and control instrument business achieved revenue of 113 million yuan, yoy -19.09%, gross profit margin of 26.78%, yoy-1.04pct, related to weak military procurement demand; composite materials business achieved revenue of 1.38 billion yuan The business contributed 100 million yuan to Changguang Aerospace, which was consolidated by the company last year. The gross margin of this business was as high as 46.87%.
A listed company under the Changchun Institute of Optoelectronics of the Chinese Academy of Sciences, leading the national defense optoelectronic measurement and control technology. The company's main business is R&D, production and sales of products such as optoelectronic measurement and control instruments and equipment, new medical instruments, optical materials, grating encoders, and high-performance carbon fiber composite products. The company's leading products are optoelectronic latitude and longitude meter opto-mechanical subsystems, aerospace/aerospace camera optomechanical subsystems, novel radar antenna holders, precision turntables, military and civilian medical testing instruments, grating encoders, missile rockets and space structural parts, and K9 optical glass. In terms of technology implementation and product production, the company is in a leading position in the upgrading and upgrading of domestic defense optoelectronic measurement and control instruments and equipment. It is a leader in the same industry and has a high market share.
Yu Heng Optics is the leading high-end in China, and there is a trend of domestic substitution. Yu Heng Optics, a holding subsidiary, is a leading enterprise in the domestic encoder field. It is the only company recognized by the state as a pilot test base for encoder engineering. In 2021, it achieved revenue of 208 million yuan, an increase of 25.40% over the previous year. In 2022, it fell 13.9% year over year to 179 million yuan. Net profit in 2022 was 124.479 million yuan, down 8.5% year on year. The decline in performance in 2022 was mainly affected by the pandemic. In the field of high-end angle encoders and absolute scales, the company has performed excellently. This is mainly due to the combined influence of various factors such as national demand, market demand, and the international situation. These factors have led to a sharp increase in domestic demand for high-end sensors. Yu Heng Optics is a core supplier of grating encoders for high-end machine tools in China. It meets the requirements for use in high-end machine tools in China. The price has a 20%-30% advantage compared to Heidenhan, the leading encoder, and has great potential for development under the trend of domestic substitution. In addition, grating scales have good application scenarios in the semiconductor and robot fields, and the company's competitiveness is outstanding.
Investment suggestions: The company's grating encoder industry is leading and is expected to achieve domestic replacement; its core composite products are self-developed and self-produced, with obvious advantages in the field of aerospace composites; we predict that the company's net profit from 2023-2025 will reach 172/243/343 million yuan. The corresponding valuations are 47x/33x/23x, respectively. Considering the steady growth of the company's core business and the layout of new fields in recent years, maintain the “recommended” rating.
Risk warning: policy risk; market risk; raw material price fluctuation risk.