Incidents:
The company released its report for the third quarter of 2023. 23Q3 achieved revenue of 1,678 billion yuan, an increase of 86.06% over the previous year, an increase of 54.40% over the previous year; net profit of 112 million yuan, an increase of 87.17% over the previous year, an increase of 26.81% over the previous year.
Comment:
The consumer electronics industry bottomed out and rebounded, and the company's performance is expected to grow rapidly. The main reason for the rapid growth in 23Q3 performance is that the consumer electronics industry entered the peak industry season in the second half of the year, and new models such as the Huawei Mate 60 series were intensively released, driving rapid growth in the company's performance. With high-quality electronics manufacturing services, the company has accumulated a large number of high-quality customers, including Huawei, Honor, Xiaomi, Wingtai Communications, Huaqin Communications, etc. Customers are widely distributed in the fields of consumer electronics, network communications, automotive electronics, and smart wearables. With the massive return of the Huawei series of products, the consumer electronics industry's prosperity bottomed out and rebounded, and the company's performance is expected to maintain rapid growth.
Expand overseas manufacturing bases, domestic and foreign dual cycles. With the Huizhou Phase II production base reaching full production, the company's production capacity has increased dramatically. In 2021, the company launched the third phase of the construction of an intelligent production base, cloud computing and industrial Internet platforms to ensure room for increased production capacity in the next three years. Furthermore, the company is actively expanding overseas bases and deepening its global layout. After successfully acquiring India's Guanghong by Holdings, the company invested in the construction of Guanghong in Vietnam and Bangladesh, and put it into use one after another in 2021. The company's global layout is expected to meet global market needs and develop extensive cooperation with customers around the world.
Communication terminals are the cornerstone, and the industrial layout is multi-dimensional. As a core supplier for Huawei, Honor, and Xiaomi, the company's order demand continues to grow. With the recovery of the consumer electronics industry, sufficient production capacity ensures sufficient growth momentum. On the basis of the original communication terminal business, the company is also vigorously expanding businesses such as smart wearables, automotive electronics, and new energy, and is actively introducing leading customers in the industry, which is expected to achieve common growth in multiple businesses.
Give it an “Overweight” rating. With its reliable manufacturing capabilities, the company has been recognized by high-quality customers such as Huawei, and is expected to fully benefit from the recovery in the consumer electronics industry. The company's revenue for 2023-2025 is estimated to be 51.20, 6500, and 7.980 billion yuan respectively, and net profit of 3.74, 4.64, and 606 million yuan respectively, corresponding to PE of 63, 50, and 39 times, respectively.
Risk warning: downstream demand falls short of expectations, industry competition intensifies, and production expansion progress falls short of expectations