Event description

According to the company's mid-2023 report, 2023H1 achieved operating income of 68.3816 million yuan, down 59.59% from the same period last year; realized net profit of-9.87 million yuan, down 118.91% from the same period last year; realized non-return net profit of-10.4738 million yuan, down 122.86% from the same period last year; and basic earnings per share was-0.15 yuan, down 116.85% from the same period last year.

Event comment

2023H1's operating income declined compared with the same period last year, mainly due to a high base in the same period last year and the recovery of downstream consumer demand. The reason for the high base in the same period last year is that in the first half of 2022, the company's embedded intelligent instrument module testing program expanded from the original application in PCBA function testing to module testing, the new product lithium battery protection board tester achieved large-scale sales in module testing, and its business income grew rapidly. The reason that the downstream consumer demand has not yet recovered is mainly due to the decline in the downstream consumer electronics sector since the fourth quarter of last year, with reduced customer procurement and delayed procurement tempo. Although there are signs of a mild recovery on the demand side, it will still take time for the overall recovery.

The net profit of 2023H1 Company changed from profit to loss compared with the same period last year, mainly due to the adjustment of sales product structure, the increase of production cost of upgrading production line, and the increase of research and development expenses and sales expenses. In order to maintain its own industry development status, the company continues to upgrade product technology to meet the customer testing needs of more industries, and actively expand new industries and application scenarios; at the same time, the company adheres to R & D innovation as the core driving force of development, the introduction of senior R & D personnel and steadily promote a number of projects under research. The sales expense rate and R & D expense rate of 2023H1 were 11.44% and 41.08% respectively, an increase of 6.31% and 22.58% respectively over the same period last year.

Significant progress has been made in the expansion of new customers, and the impact of major customers on the operation of the company is expected to gradually weaken. On the basis of existing customers in the consumer electronics industry, the company continues to seek cooperation with new customers, gradually expand its sales scope and business areas, and provide testing solutions and products for customers in the communications industry. The application of machine vision products has also been expanded. At the same time, the company actively promotes project cooperation with professional high-end instrument and equipment manufacturers to provide customers with key measurement modules such as data acquisition. For example, the company's digital multimeter module is applied to flying needle testing equipment, high-speed data acquisition module and signal processing module to laser wind radar equipment.

Investment suggestion

It is estimated that the company's revenue from 2023 to 2025 will be 2.56,3.33 and 409 million yuan respectively (the original value is 2.86,3.72 and 457 million yuan), an increase of 5.7%, 30.1% and 22.6% over the same period last year. The net profit was 0.53,0.64 and 80 million yuan respectively (the original value was 0.60,0.75 and 91 million yuan), and the year-on-year change was-1.2%, 20.7% and 24.5%, respectively. The corresponding EPS is 0.80,0.97,1.20 yuan (the original value is 0.89,1.13,1.36 yuan), and the corresponding PE is 40.0X, 33.1x and 26.6X respectively, calculated with the closing price of 32.00 yuan on September 4. Taking into account the company's high dependence on Apple Inc's industrial chain and the uncertainty of demand recovery in the consumer electronics market, the rating is adjusted to "overweight-B".

Risk hint

The risk of high dependence on Apple Inc's industrial chain; the risk of a large gap with foreign modular testing program providers in terms of income scale and technology; the risk of differential competition between modular testing instruments and traditional instruments; the risk of chip supply shortage; the risk of greater uncertainty in the recovery of demand in the downstream consumer electronics market.