Main points of investment:
Event: Weifeng Electronic Bulletin reported in the third quarter of 2023 that 23Q1-Q3 achieved operating income of 368 million yuan, an increase of 3.11% over the same period last year, and net profit of 101 million yuan, an increase of 23.82% over the same period last year. Of this total, the operating income of single Q3 was 125 million yuan, down 7.43% from the same period last year, and the net profit of returning home was 26.7725 million yuan, down 16.5% from the same period last year.
Under the background of strong macro uncertainty, revenue and homing net profit in the third quarter decreased slightly compared with the same period last year, which was basically the same as the previous month, and the performance was slightly lower than expected. The company's connector products are mainly used in the three major downstream of industrial control / automobile / new energy. In the context of relatively volatile macroeconomic environment, orders and delivery in some application fields are affected. In 2023H1, the proportion of revenue in the three major downstream of industrial control / automobile / new energy is about 65%, 17% and 16%.
Gross profit margin is stable and high, and profitability is relatively stable. 23Q3's single-quarter gross profit margin remained at a high level of 41.9%, reflecting the company's specialization in high-end precision connectors with high barriers and risk resistance.
The layout of products and customers in the field of new energy vehicles and robots is gradually enriched, and it is expected that the initial investment will gradually cash in to the performance. According to the company's investor interactive platform Q & A (the same below), the company already has automotive connectors such as low-voltage signal transmission connectors, front-end sensing (radar, high-speed camera) connectors, intelligent driving high-frequency and high-speed connectors needed for the layout of new energy vehicles. The main customers include new energy vehicle manufacturers such as BYD, tire1 customers such as IRC Power, and some engineering vehicle customers. It is expected that with the continued localization of automotive connectors, this field will become an important direction of the company and maintain high growth. In the robot field, the company's robot-related product line has been mass produced and shipped, and the downstream customer business has expanded smoothly. The company's products can be used in humanoid robots, industrial robots and other automation, intelligent manufacturing equipment, mainly used in mechanical arms and control cabinets, the main product series involved are Ihand O series, WD series, WF series and so on. The outstanding characteristics of this kind of products are high stability, high consistency, long life cycle and resistance to unfriendly application environment. At present, the related fields are mainly dominated by international first-tier brands of high-end industrial connectors.
In addition, according to the company's announcement on October 29, the company intends to use its own funds to buy back shares for the later implementation of employee stock ownership plans or equity incentive plans. The total repurchase capital is RMB 30 million-60 million yuan, and the repurchase price is no more than 70.00 yuan per share, reflecting the company's confidence in future development and recognition of its own value.
Downgrade earnings forecast and maintain "buy" rating. With reference to the results of the first three quarters, and taking into account the macro fluctuations affecting the pace of cashing in performance this year, the profit forecast is slightly lowered, and the company's net profit for 23-25 is expected to be 1.56 million 2.97 trillion (compared with the previous forecast of 2.23 million). The current share price corresponds to PE in 33-26-22, and the valuation is at an all-time low, maintaining the "buy" rating.
Risk hint: international macroeconomic and political situation fluctuation risk, industry competition aggravation risk, raw material price fluctuation risk.