Event description
On October 27, Weifeng released its quarterly report for 2023. During the reporting period, the company achieved operating income of 368 million yuan, an increase of 3.11% over the same period last year, and a net profit of 101 million yuan, an increase of 23.82% over the same period last year, deducting 81 million yuan of non-return net profit, an increase of 1.17% over the same period last year. In the third quarter alone, the company achieved operating income of 125 million yuan, down 7.43% from the same period last year. The company realized net profit of 27 million yuan, down 16.50% from the same period last year, and deducted 26 million yuan from non-parent net profit, down 13.04% from the same period last year.
Event comment
Performance is under short-term pressure and profits remain high. From the point of view of the company's revenue in the third quarter, there is a slight decline, we judge that mainly affected by the macroeconomic boom, industrial connectors are still in a weak period, overseas demand is insufficient. Considering that industrial connector companies have focused on breaking through major overseas customers, it is expected that orders will be gradually converted into production next year, further increasing the growth of industrial connectors. In terms of automotive connectors, we expect the company to continue to expand its product line next year to achieve the shipment of high-speed connector-related products such as vehicle domain-controlled PCB board end and Type-C connector components, bringing revenue growth to the company. The company's gross profit margin in the third quarter was 41.94%, slightly lower than the same period, and the net profit rate was 21.90%, which increased slightly from the previous quarter, and the company still maintained a high level on the profit side.
At the industry level, connectors belong to the long slope thick snow industry, the market space is broad. According to Bishop & Associates statistics, from 2015 to 2021, the global connector market increased from US $52.05 billion to US $78 billion. In 2022, the global connector market grew by more than US $6 billion, a year-on-year growth rate of 7.8%. The market is expected to exceed US $90 billion in 2023, which is a typical long slope and thick snow market. In 2021, the global industrial control connector market accounts for about 13%. In the future, industrial developed countries such as the United States and Germany will continue to accelerate the process of industrial automation and intelligence. in addition, developing countries are also undertaking the global industrial redivision of labor, which will promote the growth of industrial connector market demand. The global industrial equipment market will reach 306.67 billion US dollars in 2023, the domestic industrial automation market will be 240.9 billion yuan in 2022, and the domestic market will continue to expand.
As the leader of domestic industrial control connectors, the company will fully benefit from the accelerated process of domestic substitution in the industrial field in the future. in addition, the company actively expands global industrial control customers, has global competitiveness, and continues to increase its share in the field of industrial control connectors. it is expected to achieve long-term and steady growth in the future. In the field of automobile and new energy, the company has good technology accumulation and clamping advantages, and actively embrace the opportunities for the rapid development of the industry, which will become an important driving force for the company's growth in the short term, and the company is also actively storing and arranging automotive high-frequency and high-speed connectors. We are optimistic about the future growth of the company, and expect the company's return net profit from 2023 to 2025 to be 1.45,1.90 and 242 million yuan respectively, maintaining the company's "buy" rating.
Risk hint
1. Prosperity fluctuation of industrial control connector industry
2. Car sales are not as expected.