Announcement: The company's revenue for the first half of 2023 was 2.08 billion yuan, down 2.00% year on year; net profit for the mother was 85 million yuan, down 76.9% year on year; net profit after deducting non-net profit of 68 million yuan, down 66.1% year on year. 2Q23 The company's revenue was 1.14 billion yuan, up 12.4% from the previous year; net profit from the previous year was 27 million yuan, down 85.8% from the previous year; after deducting non-net profit of 36 million yuan, a year-on-year decrease of 55.6%. Performance was in line with expectations.
2Q23 The company's revenue increased month-on-month, hitting a record high in a single quarter since 2022. 2Q23 The company's revenue was 1.14 billion yuan, an increase of 22.3% over the previous month; after deducting non-net profit of 36 million yuan, an increase of 14.20% over the previous year. The company continues to strengthen market development. Sales of its main products MLCC, chip resistors, and inductors increased by 37.5%, 24.6%, and 46.0%, respectively, in the first half of 2023. Other small products continued to achieve new breakthroughs in revenue, gross margin continued to increase month-on-month, and products such as sensitive components, aluminum electrolytic capacitors, and wafer capacitors maintained a good growth trend.
Precise cost reduction and fee control. The company continued to further promote cost reduction and cost control. Through refined management, process technology improvements, equipment automation improvements, and increased labor productivity, etc., the average unit cost of the three main products of resistance decreased year-on-year in the first half of the year. The company's sales expenses and management expenses fell 11.9% and 5.39%, respectively.
Continued transformation around the high-end. 1) As of 1H23, 12 new high-end MLCCs have been added from R&D to production. Of these, 5 specifications have been delivered in small batches, and the pressure resistance level of medium and high capacity MLCCs has increased by more than 2 levels. 2) The product yield and core strategic customer code product yield of the Xianghe Project have increased dramatically. Phase III of the Xianghe Project, which is positioned as an industrial-grade and high-end consumer market, was officially put into trial production; the “4 billion laminated inductors per month” and “100 million integrated inductors per month” technical improvement and expansion projects with an investment of 600 million yuan and the “100 million integrated inductors per month” technical improvement and expansion projects were completed and project construction began.
Investment analysis opinion: Lower the profit forecast and lower the rating to increase holdings. Due to the decline in sentiment, the net profit forecast for 2023 was lowered from 1.92 billion yuan to 288 million yuan, and the net profit for 2024-2025 was added to 499 million yuan and 653 million yuan respectively. MLCC and electronic components and functional thin film materials companies related to the company's business were selected as comparable companies. Currently, an average PE of 38x in 24 years has been given to the company's PE 38x in 24, with a target market value of 19 billion yuan. There is room for an increase of 13% from the current market value, and downgraded to increase the rating.
Risk warning: MLCC demand growth falls short of expectations, mass production of high-end products falls short of expectations, etc.