Introduction to this report:
The company's 2023 performance report exceeded our expectations. The consumer electronics and automotive sectors are progressing rapidly, and various sectors such as optical prisms, glass wafers, and glass aspherical lenses have achieved positive growth.
Key points of investment:
Maintain an increase in holdings rating. Considering that the expansion of the company's business in 2023 and the increase in profitability exceeded expectations, we raised the company's 2023-2025 EPS forecast to 0.46 (+0.16) /0.74 (+0.1) /1.04 (+0.15) yuan, refer to the average valuation level of the optical industry and consider the company's high growth in the field of microprisms, maintain the company's 40x PE valuation in 2024, and raise the target price to 29.6 (+4.19) yuan to maintain an increase in holdings rating.
The results exceeded our expectations, and all business segments achieved positive growth. According to the company's 2023 performance report, the company achieved revenue of 754 million yuan in 2023, +98.35% year-on-year, and net profit to mother of 180 million yuan, +87.70% year-on-year. The 23Q4 company achieved revenue of 264 million yuan, +211.26% year over year, and net profit to mother of 89 million yuan, +182.60% year over year. We estimate that the increase in performance is mainly due to (1) optimization of the company's product structure and improvement in profitability due to the release of microprism products (2) the growth of the company's glass aspherical business driven by the development of intelligent automotive products, and (3) glass wafers benefit from the development of emerging downstream consumer electronics such as AR/VR.
Based on the precision optics market, we are continuously expanding our business layout. The company continues to cultivate the precision optical components market and continuously explore new business growth points. Looking ahead to the future market, all businesses are expected to achieve steady growth. (1) Microprism products are mainly used for periscope lenses, and the increase in periscope lens penetration rate is expected to continue to help the company's development. (2) Increased security and vehicle lens specifications place higher demands on upstream optical components, and the company is expected to usher in a sharp rise in volume and price. (3) The development of the AR optical waveguide market will gradually increase the demand for glass wafers.
Catalysts: Periscope lens penetration rate increased; AR optical waveguide market development exceeded expectations.
Risk warning: Prices of upstream raw materials fluctuate; new project introduction progress falls short of expectations.