On February 2, 2024, JP announced the company's share repurchase plan: the company plans to repurchase shares, with a repurchase amount not less than RMB 20 million and no more than RMB 30 million; the repurchase price is not more than RMB 100 per share; the source of the repurchase capital is the company's own capital. The purpose of the repurchase is to implement employee stock ownership plans or share incentives at an appropriate time in the future, and to protect the company's value and shareholders' rights. As of February 6, 2024, the company had repurchased 110,200 shares through centralized bidding, accounting for 0.12% of the total share capital. The highest repurchase transaction price was 48.35 yuan and the lowest was 43.46 yuan.
Key points of investment
23Q3 performance increased month-on-month, and I am optimistic that the company's profitability will continue to improve
The company achieved operating income of 338 million yuan in the third quarter of 2023, up 35.26% year on year, 25.42% month on month, and achieved net profit of 35 million yuan, up 149.28% year on year, up 86.22% month on month; gross sales margin was 41.94%, up 8.69 pcts year on year, up 2.35 pcts month on month; net sales margin was 10.31%, up 4.8 pcts year on year, up 3.48 pcts month on month. The company achieved operating income of 904 million yuan in the first three quarters, up 12.16% year on year; realized net profit of 84 million yuan, up 64.71% year on year, gross sales margin of 39.45%, up 6.03 pcts year on year; net sales margin was 9.24%, up 2.97 pcts year on year. The company's main business is R&D, production and sale of industrial lasers, laser precision processing equipment and optical precision inspection equipment. The products are mainly used in precision manufacturing and testing of smart phones, semiconductors, integrated circuits, passive components, power batteries, photovoltaic materials, etc. At present, the inflection point in performance is beginning to appear. We believe that the company is expected to benefit from the recovery of downstream consumer electronics, and we are optimistic that the company's profitability will continue to improve in the future.
The era of spatial computing is getting closer, and MR testing equipment is expected to continue to benefit
On the evening of January 19, 2024, Apple's first MR headset, Vision Pro, began pre-orders. In just half an hour, some regions sold out. Prior to the official launch on February 2, Vision Pro had already sold 200,000 units, with sales exceeding $5 billion. We believe that the launch of Apple Vision Pro marks an important step forward for the XR industry and is expected to accelerate the evolution of the mobile computing era into the spatial computing era. According to Wellsenn XR forecasts, global shipments of XR devices are expected to increase from 10.28 million units in 2022 to 38 million units in 2025. At the technical level, the essence of VR/MR displays is to enlarge and project the screen to the human eye through an optical system. Optical distortion has a great impact on the MR product experience. Therefore, optical systems are directly related to the user experience of MR products. Imaging defects on display screens are a key indicator for testing the quality of VR/MR glasses, and require extremely precise optical systems to calibrate and measure. JPT's MR glasses module tester can be applied to lens imaging distortion detection. It can accurately measure the screen pixel position located at the center of lens optics, analyze differences in binocular imaging distortion, reduce the user's sense of dizziness when wearing VR/AR devices, and increase comfort of use. In addition, the device can also test multiple parameters of MR device imaging defects, mainly including image clarity, screen defects, differences in screen brightness, contrast, pupil movement, lens focal length, ghosting, etc. In terms of downstream customers, the company has maintained close communication with leading customers in the industry for a long time. The XR testing equipment produced by the company exclusively provides imaging distortion detection in the lens process for two major customers in North America. In the first half of 2023, the company helped customers develop second-generation MR products and plans to add more optical inspection projects, and the variety of inspection equipment will be further expanded. With the gradual release of MR products from downstream customers, it is expected to drive the company's sales of optical inspection equipment to increase.
Forward-looking layout of new energy tracks, continuous release of related products
The company began deploying new energy fields such as lithium batteries and photovoltaics in 2021. In terms of lithium batteries, the lasers produced by the company can replace imported lasers in large proportions, and have won the trust and orders of mainstream customers. In 2023, the company also received orders for lasers related to energy storage and corresponding accessories from leading customers in the industry; in terms of photovoltaics, the lasers independently developed by the company can provide customers with solutions with higher photoelectric conversion efficiency, becoming one of the first manufacturers in the industry to achieve batch shipment of TopCon SE laser-doped light sources; in terms of perovskite batteries, the company can provide intelligent laser equipment for high-precision marking of thin-film batteries, which can cover P1 to P4 laser die-cutting and laser edge cleaning processes in perovskite battery production. In 2023, the company successfully obtained the first 100 megawatt order and cooperated with GCL Optoelectronics to build a full set of laser marking equipment for a 100MW perovskite photovoltaic cell mass production line. At the end of July 2023, the company successfully delivered a complete set of 100MW perovskite laser marking equipment. At present, the company has begun to develop a next-generation GW mass production line. In the future, with the continuous development of the photovoltaic industry, the company's perovskite battery laser marking equipment is expected to expand further. On December 30, 2023, the company issued the “Plan for Issuing A Shares to Specific Targets in 2023". It plans to raise no more than 1,271 billion yuan from no more than 35 people (including 35), and the number of shares issued should not exceed 30% of the total share capital before issuance, that is, no more than 28,497,283 shares (including capital). The purpose of this release is to further deepen the fields of consumer electronics, new energy batteries and photovoltaics, and to provide customers with laser solutions more suited to their unique needs in application fields such as module inspection, optical inspection, and passive components.
Profit forecasting
Based on prudential considerations, without considering the impact of additional issuance on performance and share capital, it is predicted that the company's revenue for 2023-2025 will be 14.2, 18.46, and 2,492 billion yuan, respectively, and EPS will be 1.46, 2.23, and 3.34 yuan respectively. The current stock price corresponds to PE of 37.5, 24.6, and 16.4 times, respectively. Benefiting from the increase in global headphone equipment sales, the company's optical inspection equipment business is expected to continue to be empowered and given a “buy” investment rating.
Risk warning
Apple Vision Pro sales fell short of expectations; Pancake's technology upgrade iteration fell short of expectations; the company's technology product upgrade iteration fell short of expectations; the competitive landscape of the industry fell short of expectations; and the progress of additional sales fell short of expectations.