The clearance of depreciation ushered in positive performance growth. The business structure was further optimized. The company issued a performance forecast. The company's net profit for 23 years was 1.6-215 billion yuan, and net profit after deduction was 1.3-175 million yuan; the 23Q4 single quarter achieved net profit of 0.36-0.91 billion yuan, and the net profit after deducting non-net profit of 0.12-0.57 billion yuan. The performance changed from negative to positive. At the same time, the production and sales volume of the company's key transformation and development of the system doors and windows and automobile lightweight aluminum profile business grew rapidly and the proportion increased, and the business structure was further optimized. We expect the company's net profit to be 1.9/2.4/290 million in 23-25, corresponding PE of 28/23/19 times, maintaining a “buy” rating.
Invest 290 million yuan to share opportunities for optical module development, and Haomei New Materials announced that it will invest in Solus Optoelectronics as a foreign investment of US$2.6179 per share, with an investment amount of US$40 million (approximately RMB 290 million). After exercising the convertible bonds, it will acquire approximately 5.79% of Solsil Optoelectronics's shares (after dilution). At the end of 2022, Solstice Optoelectronics had total assets of about US$319 million, net assets of about US$124 million, achieved revenue of US$226 million, and net profit of approximately US$26.8 million. Its core product, optical modules, are one of the core components of optical communication systems and are the basic units that make up data center interconnections, 5G bearer networks, and all-optical access networks. According to LightCounting's forecast, the global optical module market will continue to grow at an average annual rate of 12% over the next 5 years, surpassing $20 billion in 2027. The purpose of the company's investment is to subscribe to Series D preferred shares issued by the company Solus Optoelectronics, which may increase the company's investment income in the future.
The production capacity of industrial automotive materials is sufficient, and the system door and window penetration rate is expected to increase in industrial materials and automotive materials. Currently, the total production capacity is about 180,000 tons. As the largest supplier of lightweight automotive materials in South China, the company's battery tray materials are mainly supplied to models related to the Wangjie series after processing and assembly by auto parts companies. The system door and window brand “Becklow” is deeply tied to leading window factories across the country, and participates in bidding and procurement of real estate companies. Becklow provides product research and development, design, supply and installation standards training for materials and components such as aluminum profiles, hardware, rubber strips, etc. The door and window factory is responsible for processing and installation in real estate projects. The project won more than 1 million square meters in the first half of '23, an increase of 135% over the previous year. According to Haomei New Materials's 2023 semi-annual report, the penetration rate of domestic system doors and windows is currently only 2%-5%. Compared with the penetration rate of more than 70% of European system doors and windows and the implementation of domestic green building policies, we believe that the penetration rate of system doors and windows is expected to increase rapidly in the next few years.
Risk warning: risk of falling automobile sales; risk of sharp rise in raw material prices; trade policy risk; real estate start falling short of expectations; safety risk; Solstice Optoelectronics's operation falls short of expectations; investment is still subject to relevant approval; performance forecasts are only preliminary accounting results.