This report is read as follows:

The company's 23H1 performance is growing steadily, and with the recovery of downstream demand for consumer electronics and the rapid development of electric and intelligent cars, the company is expected to accelerate the pace of growth.

Main points of investment:

Maintain the overweight rating. Taking into account the lower-than-expected recovery in consumer electronics demand, we downgrade the company's EPS forecast for 2023-2024 to 0.22 yuan (- 0.15) / 0.32 (- 0.16) yuan, and add 2025 EPS forecast to 0.42 yuan. Taking into account the average valuation level of the industry, taking into account the company's growth in the automotive industry and the recovery of consumer electronics, we give the company 2024 40x PE, lowering the target price to 12.8 yuan (- 2.19) yuan.

The performance was slightly lower than expected and the automobile business grew steadily. 23H1 achieved operating income of 490 million yuan, year-on-year + 20.98%, net profit of 42 million yuan, + 19.49%, + 27.67%, and net profit of 22 million yuan, + 8.77%, respectively. Main products, the company's 23H1 automotive products revenue of 375 million yuan, year-on-year + 33.25%, accounting for 76.44%; mobile phone product revenue of 83 million yuan, year-on-year-10.62%. The 23H1 automotive business has become the main growth driver of the company, and the company's performance is expected to accelerate as consumer electronics demand recovers in the second half of the year.

The recovery of consumer electronics has opened up space, and the growth of automobile business has accelerated. In the field of automotive electronics, the company has supplied Valeo, Keshida, BYD, Ningde Times and other well-known manufacturers at home and abroad, and the products have been used in Tesla, Inc., XPeng Inc., NIO Inc., etc., covering complete vehicles, ADAS, intelligent network connection, 5G communications, etc., will continue to benefit from the development of automobile intelligence and electrification. In terms of consumer electronics, the company has achieved the supply of major international mobile phone manufacturers, with the recovery of consumer electronics demand, the company is expected to accelerate the pace of growth.

Catalyst. The consumer electronics market is picking up, and the development of intelligent and electrified cars is accelerating.

Risk hint. The market competition is intensified; the speed of technological innovation and research and development is slow.