Established optical module supplier, Lijing is in charge of promoting business integration and development. The company is a supplier of precision optical modules for electronic mobile equipment. Since 2009, Apple Inc has purchased the camera modules produced by the company and become the company's biggest customer. In 2020, Lijing Innovation (Mr. Wang Laixi, Jingshan and Guangbao own about 53.41%, 43.66% and 2.93% respectively) became the owner of Gao Wei Electronics, and the board members and structure were comprehensively restructured.
Closely bound to the business of major customers, the company's revenue and net profit have increased year by year. In recent years, the gross profit margin has remained stable and the net profit margin has shown an upward trend. In 2022, the company's capital expenditure increased by 256% compared with the same period last year, and the company continued to increase its business R & D and innovation.
Closely tied to the business of major customers, innovation drives the new growth of cameras. Shipments of mobile camera modules will increase by 3.6% a year to 4.62 billion in 2023, when the global economy is expected to slowly stabilize. The camera module market is expected to grow from $49.46 billion in 2023 to $76.1 billion in 2028, with a compound annual growth rate of 9%. The global camera module market CR5 is 59%, and Gao Wei's share is only 2% (20 years). Apple Inc FC camera packaging technology has high barriers to entry, and Gao Wei has the advantage of building a moat. Oufeiguang withdrew from Apple Inc's supply chain and the company's market share is expected to increase, benefiting from the vertical integration of CCM and VCM or becoming one of the winners of this upgrade. In addition, Apple Inc has considerable market space (the value of a single machine is nearly US $100,000,000, and the total market space is estimated to reach US $22.1 billion). Gao Wei is expected to be selected as a supplier of Gao Wei's rear camera group.
Apple Inc MR's new product may drive the company's revenue. The number of Apple Vision Pro camera modules is as high as 12, or it may be supplied by Gao Wei alone. We believe that the indirect relationship between Gao Wei Electronics and Lixun Precision may strive for more voice for Gao Wei in Apple Inc's new product market. Continue to be optimistic about Vision Pro to open the era of space computing, industrial space is expected to target PC and smartphones, with the future Apple Inc MR shipments, the company's revenue will appear new growth points.
Join hands with Suiteng to open up the lidar track to help the company grow again. Vehicle lidar is considered to be a necessary sensor for self-driving at and above the L3 level. by the third quarter of 2023, 36 Chinese car companies have announced the use of lidar, and it is expected that as many as 106 models equipped with lidar will be on the market in China, accounting for nearly 90% of the total number of new models with lidar expected to be released worldwide in the same period. The on-board lidar market continues to grow, driven by demand for passenger cars and Robotaxi, and 3 per cent of passenger vehicles in China are expected to reach the L3 auxiliary driving level in 2023. Lixun actively explores the trend of the restructuring of the automotive industry chain and the volume of emerging business (Lijing Innovation and Suiteng Juchuang set up a joint venture Liteng Innovation), and Gao Wei Electronics in the Lixun Group system also benefits. won the module OEM order of Suteng Juchuang radar.
Investment suggestion: the company is expected to introduce iPhone rear camera module business and benefit from the subsequent growth of Apple Inc VisionPro. In addition, lidar products are expected to increase or open the company's second growth curve.
We estimate that the company's annual operating income in 2023-24-25 will be 165.93 billion yuan and net profit will be 5.99 billion yuan and 1.78 billion yuan respectively. It is estimated to give a 24-year valuation of 20 times PE, corresponding to the target price of HK $29.81.
Risk tips: shipments of major customers' mobile phones and MR products are not as expected; competition in the lidar industry is intensified; the consumer electronics industry is not as prosperous as expected; the competitive pressure of a new Android phone is intensified; the company's research and development is not as expected.