Event: Company Releases 2023 Semi-Annual Report
The company's revenue and net profit for the first half of 2023 decreased 14% year on year, 45%. The company achieved total revenue of 1,057 million yuan in the first half of 2023, a year-on-year decrease of 14%; realized net profit of 207 million yuan, a year-on-year decrease of 45%. In the Q2 quarter, the company achieved a total revenue of 614 million yuan, an increase of 25% over the previous year; realized net profit of 144 million yuan, an increase of 120% over the previous year, and achieved a year-on-year correction of revenue and profit.
The low performance point is gradually over, and the company's profit level is expected to gradually rebound 1) Affected by changes in model project procurement plans, military price adjustments, and value-added tax policies, etc., the company's revenue and profit have declined since last year. The revenue growth rates of the 22Q3-23Q2 company were -18%, -23%, -40%, and 25%, respectively, and the year-on-year growth rates of net return profit were -33%, -113%, -80%, and 120%, respectively, with significant improvements.
2) In the first half of 2023, the company's gross profit margin was 53.92%, up 0.54 pct from the previous year; the net profit margin was 19.47%, down 11.2 pct from the previous year, mainly due to the increase in the company's R&D investment and labor costs. Benefiting from short-term military business recovery, long-term benefit scale effects and product structure optimization, the company's profit margin is expected to continue to rise.
Full technology path infrared leader, military+civilian goods, domestic demand+foreign trade driving performance growth 1) Military sector: The company also masters both non-refrigerated and refrigerated infrared paths. It is the only private enterprise in China that has obtained overall equipment qualifications. The company's overall equipment system products have already received an order contract. At the same time, the company has completed the approval of foreign trade export projects for various products, which is expected to fully benefit from the continuous development of China's military trade.
2) Civilian sector: The construction of the company's non-public fund-raising project has been completed, increasing the production capacity of infrared core devices and standardized modules for civilian use, further reducing costs and improving operational efficiency. The company actively lays out many industries such as outdoor night vision, electricity, instrumentation, car assistance, etc., and the civilian goods business is expected to expand rapidly.
The company's on-board infrared has successively landed in Dongfeng and Guangzhou Automobile, and the progress of infrared onboarding is expected to accelerate 1). In August '22, the company and Dongfeng Warrior released M-Terrain equipped with an infrared driving assistance system; in September, the company announced that it had completed a fixed target for the GAC Aian infrared front installation project, and that infrared onboard is expected to accelerate.
2) Cost is the core factor affecting the expansion of civilian infrared. With the maturity of unrefrigerated infrared detectors and wafer packaging technology, civilian infrared has gradually dropped from 10,000 yuan to 1,000 yuan, and vehicle infrared has reached the industrial application point.
3) Infrared imaging has significant advantages at night and in human recognition, effectively solving the defect that existing intelligent driving systems easily fail in some scenarios. In the future, “laser+millimeter+infrared” multi-mode composite sensing is expected to become mainstream. Under the continuous layout of leading car manufacturers such as GAC and BYD, the rest of the manufacturers are expected to follow up quickly.
Gaode Infrared: The compound growth rate of net profit from 2023 to 2025 is expected to be 30%, and the company's net profit from 2023-2025 to be 603, 847, and 1.01 billion yuan respectively, up 20%, 40%, and 30% year-on-year, CAGR = 30%. The corresponding PE is 55, 39, and 30 times, maintaining the “buy” rating.
Risk warning: 1) the release of military goods orders falls short of expectations; 2) the expansion of the civilian goods business falls short of expectations.