OFILM released its report for the third quarter of 2023: in the first three quarters of 2023, the company achieved revenue of 10.819 billion yuan, a year-on-year decrease of 0.05%; net profit loss of 299 million yuan, narrowing year-on-year; net profit loss after deduction of 569 million yuan, and the loss margin narrowed year-on-year. According to calculations, in the single quarter of 2023, the company achieved revenue of 4.505 billion yuan, an increase of 47.75% over the previous year, an increase of 24.49% over the previous year; realized net profit of 54 million yuan, a year-on-year reversal of losses, an increase of 1136.75%; and realized net profit of 4.557 million yuan after deduction, turning a loss into a profit over the previous year and month on month.
Key points of investment
2023Q3 net profit reversed losses year on year. The positive trend in performance was obvious in the first three quarters of 2023. The company's performance improved quarter by quarter. Overall revenue has basically recovered to the same period in 2022, with a slight decrease of 0.05% year over year. In terms of profitability, benefiting from the drastic reduction in operating losses and the continued strength of cost reduction and efficiency, the company's net profit in the 2023Q3 quarter reversed losses year-on-year, increasing 1136.75% month-on-month. After deducting non-net profit for the first time since Q2 in 2021, the positive trend in performance is obvious.
Smartphone optical technology continues to break through, high-end lenses accelerate the penetration of companies, focus on R&D and innovation, and continuously increase the proportion of high-value-added products. Development expenditure in the third quarter was 271 million yuan, an increase of 59.18% over the previous year. In the field of camera modules, MGL high definition modules, CMP/GMP miniaturized modules, floating focus macro modules, and periscope telephoto macro modules have achieved mass production. Technologies such as 10x continuous zoom, chip stabilization, variable aperture, and retractable modules have completed technology development, and new module technologies such as interchangeable lenses and polarization filters are being actively deployed. In terms of high-end lenses, 100 million pixel 7P optical lenses and periscope 3X telephoto lenses have begun small-scale production; multi-performance products such as telephoto lenses, macro lenses, and ultra-wide-angle lenses have all entered the lens supply chains of mainstream domestic mobile phone manufacturers.
Actively expand innovative businesses, and the smart car business is expected to become the second growth pole
The company supports the steady development of the smartphone business, accelerates the development of innovative businesses such as smart cars and new fields, and establishes a business structure system for the three major sectors of smart phones, smart cars, and new fields. (1) Lay out optical optoelectronic business in new fields such as smart door locks, VR/AR, machine vision, action cameras, industry, and medicine. Currently, some products have been mass-produced. (2) The smart car business is the focus of the company's transformation, with a deep layout of intelligent driving, body electronics and smart cockpits. The automotive-grade 8M COB package has passed AEC-Q certification, and the electronic rearview mirror has been approved as a designated project. Currently, it has obtained supplier qualifications from more than 20 domestic automobile manufacturers, and is actively carrying out supplier certification for foreign automobile manufacturers. The smart car business's share of revenue has continued to rise in the past three years. As of June 30 this year, this business was the only sector with increased performance in the past three years.
Profit forecasting
It is predicted that the company's revenue for 2023-2025 will be 156.27, 253.36, and 37.196 billion yuan, EPS of -0.001, 0.29, and 0.61 yuan respectively, and the current stock price corresponding to PE is -14466, 33, and 16 times, respectively. According to the third quarter global smartphone market research report released by Canalys, the decline in the global smartphone market slowed in the third quarter, falling by only 1%, which is significantly narrower than the 11% year-on-year decline in the previous quarter, and the consumer electronics market is expected to recover in the future. We are optimistic about the prospects of the consumer electronics market and the company's key layout in the smart car field. We covered it for the first time and gave it an “increase in holdings” rating.
Risk warning
The risk of continued deterioration of the international trade environment, risk of asset impairment, risk of technology iteration, risk of increased industry competition, etc.