Events:
On October 26th, the company released its three-quarter report for 2023, with a gross profit margin of a single-quarter high in nearly three years. In 2023, Q3 realized operating income of 2.248 billion yuan, down 9.5% from the same period last year, and its net profit was 324 million yuan, down 22.42% from the same period last year. The gross profit margin in the third quarter was 28.57%, up 2.58 percentage points from the same period last year.
Comments:
Adhere to high-intensity R & D investment, continue to broaden the company's technology moat. The company has always attached great importance to technology research and development and persisted in technology-driven enterprise development. the company's R & D expenditure in 2020-2022 was 586 million yuan / 628 million yuan / 640 million yuan, which won the title of "intellectual property advantage Unit of Shenzhen City in 2022". The continuous R & D investment enables the company to have the one-stop innovation ability of "materials-> parts-> modules" and accurately grasp the technological development trend of the industry. Can provide customers with diversified, customized, high value-added innovative products and solutions.
Constantly develop new products and open up the growth space of the company in the future. After listing, the company continued to expand its product category through endogenous development and epitaxial mergers and acquisitions, focusing on the production of radio frequency antennas from the beginning. Up to now, six solutions have been formed, such as LCP/MPF antenna, 5G Massive MIMO antenna, 5G millimeter wave antenna module, UWB module, wireless charging module, high-performance precision connector, MLCC passive components, etc., such as RF connection, wireless charging, high-speed interconnection, precision structure, electromagnetic shielding / compatibility, passive components, etc., which have laid a solid foundation for the company's future development.
Actively cut into the international major customer chain and strengthen close cooperation with downstream customers. In terms of BTB connectors, the company's ultra-small spacing BTB connector technology is in the lead, realizing the batch supply to well-known technology manufacturers at home and abroad, and has been imported into North American major customer projects. In the field of satellite communications, the company has maintained close contact with relevant technology manufacturers around the world and actively sought cooperation opportunities. With its excellent performance, the company's LCP products have been cut into the international major customer supply chain; in the automotive interconnection business, the company can provide customers with a variety of products, and has obtained a number of mainframe factories and Tier1 supply qualifications at home and abroad. In the field of passive components, the company is based on high-end products and has reached cooperation with a number of customers in the field of domestic substitutions. at present, it has entered the stage of small batch trial production and is ready to put into mass production in the future.
First coverage: give a "buy" rating. With the recovery of the downstream consumer electronics market, the company's new products continue to introduce more downstream customers, the company's performance is expected to achieve steady growth and high-quality development. It is estimated that the company's revenue from 2023 to 2025 will be 7.775 billion yuan / 9.253 billion yuan / 11.116 billion yuan respectively, the net profit will be 695 million yuan / 1.01 billion yuan / 1.341 billion yuan, and the corresponding PE will be 35.61 million 24.52 pounds 18.46 respectively.
Risk hint: the recovery of downstream consumer electronics market is slow; the promotion of new products is not as expected