Maintain an increase in holdings rating. We maintain the company's 2023-2025 EPS forecast of 0.22/0.32/0.42 yuan respectively, maintain the company's 2024 40x PE valuation level, maintain the target price of 12.8 yuan, and increase the holding rating.
The performance was generally in line with expectations. The company announced the third quarter report on 2023 results. The company achieved revenue of 778 million yuan in the first three quarters, +15.80% year-on-year, and net profit of 66 million yuan, +12.22% year-on-year. Looking at a single quarter, 23Q3 achieved operating income of 287 million yuan, +7.94% year-on-year, and net profit of 0.24 million yuan, +1.28% year-on-year. Steady growth has been achieved in the face of an overall downturn in the industry.
Relying on the advantages of the automotive field, we are gradually expanding into fields such as communications and new energy. The company's products have fully covered application fields such as terminal new energy vehicles, ADAS intelligent assisted driving, intelligent connectivity, and 5G communication, etc., and will continue to benefit from the development of intelligent and electrified automobiles. Customers that have already been introduced include well-known auto parts companies such as Valeo, Magna, Koseda, and BYD Group. The products are used in car companies such as Volkswagen, GM, BYD, Tesla, Xiaopeng, and Ideal. In terms of mobile phones, the company supplies internationally renowned communication terminals through ODM/OEM companies such as Wentai and Longqi. In 2023, the company actively invested in the development of new projects such as multi-core plug-in quick-lock communication module connectors on photovoltaic inverters, roof photovoltaic connectors, 800G optical module housing products, 1500V energy storage connectors, and hydrogen energy battery pack test benches, which will help the company develop steadily over the long term.
Catalysts: The consumer electronics market is picking up; intelligent and electrified automobiles are developing at an accelerated pace.
Risk warning: Market competition is intensifying; technological innovation and R&D are slow.