Incident: On the evening of August 30, the company disclosed its 2023 semi-annual report. According to the company's semi-annual report, 2023H1 achieved revenue of 4.20 billion yuan, -13.81% year-on-year; realized net profit of -279 million yuan, -370.32% of the same period; net profit after deducting non-net profit of -301 million yuan, -539.94% year-on-year.
Profitability improved month-on-month in a single quarter, and the gross profit side of optical and touch display products was under pressure. A single 23Q2 company achieved operating income of 2,242 billion yuan (yoy: -21.82%, qoq: 14.52%), net return profit of -120 million yuan (yoy: -261.22%, qoq: 42.53%), and achieved a gross sales margin of 9.45% (23Q1 gross sales margin of 8.30%, improvement over the previous month). By business, the gross margin of 23H1 optical products and touch display products declined slightly, which had a certain impact on revenue. The revenue of 23H1 optical products was 1,135 billion yuan (yoy: -24.70%).
Touch display product revenue was 1,271 billion yuan (yoy: -39.96%); application terminal revenue and gross margin both increased, 23H1 achieved revenue of 1,314 billion yuan (yoy: 83.27%), and gross margin increased 1.67 pct to 5.11%.
Tesla is leading the intelligent driving BeV+Transformer, and the importance of visual routes has been further strengthened.
BEV+Transformer is the “heavy perception” autonomous driving algorithm route proposed by Tesla. BEV (Bird's EyeView) combines the Transformer neural network model, uses visual perception as the core, opens up God's perspective for autonomous driving, and transforms traditional 2D images into 3D perception from a bird's-eye view. Bev+Transformer empowers automobiles to sense the surrounding environment with high accuracy on their own. Autonomous driving can gradually get rid of its dependence on high-definition maps, and the autonomous driving route of multi-sensor fusion+high-precision maps is gradually being replaced by a “heavy perception, light map” model.
Currently, under Tesla's leadership, mainstream smart driving players in China, such as Huawei, Wei Xiaoli, Horizon, Baidu, My Little Pony, and Momo Zhixing, have followed the BEV “heavy perception” route and made a big difference in the launch of the city's NOA this year. According to Yanzhi Auto Analysis, under the BeV+Transformer route, each vehicle will need to add 4-6 cameras, 6-8 serial chips, and 2-3 deserialized chips, which is expected to bring opportunities to the intelligent driving vision industry chain.
The company is the main supplier of ADAS lenses in China and continues to deepen cooperation with well-known customers at home and abroad. In the first half of 2023, the company maintained its leading position in the global industry of high-definition wide-angle lenses, and continued to deepen its layout in the two major businesses of automotive and mobile phones. In terms of automotive ADAS lenses and video modules, the company continues to increase cooperation with overseas car company T, deepen strategic cooperation with internationally renowned advanced automotive assisted driving safety solutions companies such as Mobileye and Nvidia, and expand the market share of automotive lenses in well-known European and American automotive electronics manufacturers Aptiv, Valeo, and Magna. The company also attaches importance to cooperation with advanced domestic automotive-assisted driving safety solutions companies such as Horizon and Baidu, and expands cooperation with well-known domestic terminal car manufacturers such as NIO, BYD, and Geely for vehicle cameras and video modules. With the joint promotion of policies, new car builders, traditional car manufacturers, solution providers and technology giants, etc., intelligent automobile driving technology has developed rapidly, market demand for automotive optical products continues to increase, the number of cameras and camera specifications mounted on bicycles continues to rise, and the company's future development prospects are broad.
Investment suggestions: Based on the company's semi-annual performance report for 2023, we adjusted the company's revenue forecast for 2023-2025 to 109.54/120.70/13.95 billion yuan, adjusted the company's net profit forecast to 0.12/398/669 million yuan, and maintained a “buy” rating of 856.70/25.73/15.30 times the corresponding PE with a market value of September 1, respectively.
Risk warning: risk of fluctuations in raw material prices; risk of macroeconomic recovery falling short of expectations; risk of downstream intelligent driving development falling short of expectations.