Month-on-month improvement in 3Q23 performance
The company released its three-quarter report in 2023, with operating income of 541 million yuan in the first three quarters, a decrease of 21 percent over the same period last year, and a net profit loss of 27.64 million yuan, compared with a profit of 67.32 million yuan in the same period last year. Of this total, 3Q23 achieved an operating income of 211 million yuan in a single quarter, a decrease of 17 percent over the same period last year, an increase of 17 percent over the previous year, and a net profit loss of 9.92 million yuan, a decrease of 129 percent over the same period last year, and a loss of 4.61 million yuan compared with the same period last year. 3Q23's single-quarter operations recovered after a slowdown in the first half of the year.
Various effects led to losses in the first three quarters.
The reason for the company's loss in the first three quarters was the decrease in operating income compared with the same period last year, and the price reduction of some products led to a decline in gross profit margin. The comprehensive gross profit margin in the first three quarters fell 4.9 percent from the same period last year, but 3Q23 has increased by 4.8 percent in the single quarter. Continue to carry out R & D and technological innovation, the corresponding R & D expenses increased compared with the same period last year, and the R & D expenditure rate was at a higher level in the industry. The R & D expenditure in the first three quarters reached 79.32 million yuan, an increase of 20.16 million yuan over the same period last year, and reached a high level of 30.03 million yuan in the third quarter alone. According to the principle of prudence, the company made provision for impairment of relevant assets, and the asset impairment loss in the first three quarters was 12.47 million yuan, an increase of 5.32 million yuan over the same period last year.
High-speed Datong optical chips have achieved small batches, and narrow linewidth lasers for satellites are in the sample delivery stage. The company focuses on AWG chips and components for 400G/800G optical modules, parallel optical modules, continuous wave high-power lasers and other key technologies, such as ultra-wideband dense wavelength division multiplexing (AWG) for coherent communications, and has now achieved customer verification and small batch shipments. In terms of high-speed chips, 50G PON EML and PAM4 100G EML are being developed; 25G 1286nm DFB lasers are being validated by customers. In addition, in the field of satellite communications, the narrow linewidth laser products developed by the company can be used in the field of satellite communications, and the products are already in the stage of sample delivery and performance verification.
Plan to set up a subsidiary in Thailand to deal with trade risks
The company plans to use its own funds to invest and set up an overseas subsidiary in Thailand, with a total investment of 5 million US dollars, mainly to realize the company's international development strategy, tap the market space, and make full use of Thailand's international trade advantages to deal with future trade risks. improve the company's overall order delivery capacity to further meet the needs of customers and expand the international market. In addition, the company's acquisition of AOI China assets and related businesses has been suspended, and there is uncertainty in the future.
Profit forecast and investment suggestion
Due to the company's continuous losses in the first three quarters, we downgrade the company's profit forecast and estimate that the net profit from 2023 to 2025 will be 10.82 million yuan, 67.99 million yuan and 101 million yuan respectively (the previous value is 66.09 million yuan, 91.41 million yuan and 118 million yuan). The corresponding price-to-earnings ratio for 24-25 years is 79 times and 53 times respectively, maintaining the "overweight" rating.
Risk hints: iterative risk of technology upgrading; risk of R & D failure; risk of brain drain of key technologies; failure to recover demand for optical chips in the second half of the year; uncertainty of investment in Yuhan Optoelectronics.