Report summary:
In the first three quarters of 2023, the company achieved operating income of 3,070 billion yuan, a year-on-year decrease of 0.49%, and achieved net profit of 237 million yuan, an increase of 3.66% over the previous year. Looking at a single quarter, Q3 2023 achieved revenue of 1.24 billion yuan, an increase of 7.06% year on year, and realized net profit of 99 million yuan, an increase of 8.79% year on year. The gross margin of Q3 in 2023 was 26.95%, up 5.02 percentage points from month to month. From the cost side, the sales, management, R&D and financial expenses ratio of Q3 in 2023 was 2.09%/7.74%/7.52%/0.38%, respectively, +0.03/-2.03/+2.49pcts, and -0.34/+0.70/-1.24/+3.72 pcts month-on-month.
Deeply tied to the two major customers in North America, with multiple levels of rich product categories. The company uses the die-cutting business as a fulcrum to continuously expand its metal structural parts, modules, and FATP business. Through cooperation with terminal brand customers, the company continues to iterate technology development and manufacturing capabilities. After more than ten years of in-depth cooperation with Apple, the company's products have covered all categories of customers, including computers, tablets, smartphones, smart wearables, and Apple Vision Pro recently released by Apple. The company mainly supplies die-cut parts and cushions for Apple Vision Pro. Currently, Apple is still the company's largest customer. The company further established in-depth cooperation with Tesla, the number one manufacturer in the field of new energy vehicles, to supply components and parts for various models. The two North American customers account for more than 50% of the company's total revenue. Starting with consumer electronics, the company gradually expanded horizontally in the fields of new energy vehicles, information storage, energy storage, hydrogen energy, etc., and evolved from a single component supplier to a platform company with multiple business collaboration.
Consumer electronics showed a recovery, and the automotive business opened up new growth. The company has established in-depth cooperation with two strategic customers, Apple and Tesla, and continues to expand in the field of consumer electronics and new energy vehicles. Among them, the consumer electronics industry is currently in a recovery phase. According to data from the third-party consulting agency TechInsights, in the fourth quarter of 2023, the global smartphone market experienced a rebound, with shipments increasing 7.1% year on year to 317 million units, ending the slump of the past nine quarters. Among them, Apple topped the list with 22.6% market share, up 1% year on year. The consumer electronics industry, represented by smartphones, has bottomed out and rebounded, and the company's consumer electronics business will enter a new growth cycle.
Second, in 2023, global NEV sales reached 13.394 million units, up 32% year on year. Of these, Tesla delivered 1.809 million units, an increase of 38% year on year, and is the world leader in pure electric vehicle delivery. The global penetration rate of new energy vehicles continues to rise, driving the company's automotive business to achieve new breakthroughs.
First coverage, giving a “buy” rating. The company's revenue for 2023-2025 is estimated to be RMB 4.578/51.57/6.178 billion yuan, and net profit to mother is RMB 2.92/3.81/527 billion, respectively, and the corresponding PE is 29.51/22.61/16.34, respectively.
Risk warning: Consumer electronics recovery falls short of expectations, downstream car sales fall short of expectations