The company's connectivity business was under pressure in the first three quarters of 23, and high-speed digital optical modules are expected to expand in 24 years: in terms of connectivity, overall revenue for the first three quarters of 23 was 2,289 million yuan, down 48% year on year, and net profit of 109 million yuan, down 46% year on year. Among them, due to delays in the operator construction cycle, wireless connectivity business revenue was 480 million yuan, down 77% year on year; optical connectivity business revenue was basically flat, with net profit of 94.2 million yuan, up 8.2% year on year. According to LightCounting, sales of 800G Ethernet optical modules surpassed 400G modules for the first time in Q4 2023, and the high growth trend will continue in 24-25. The 800G high-speed optical module product launched by the company and the world's first 400GZR+Pro coherent optical module product have received widespread attention from major customers at home and abroad. Currently, the products are progressing smoothly and are expected to provide new profit growth points for the company's connectivity business. In the future, the company will accelerate the layout of high-speed optical module products applied to LPO and simultaneously develop 1.6T and 3.2T products.
The automotive sensor business remained strong, and its market share continued to increase: in the sensing business, sensor business revenue reached 2.27 billion yuan in the first three quarters of '23, up 45% year on year, and net profit of 346 million yuan, up 65% year on year. The company's sensor business maintains a leading position in the NEV and smart home industries. Shipments of various products such as NEV thermal management systems, pressure sensors, and automotive integrated sensing sensors have reached record highs, and the market share continues to increase; products such as temperature sensors, PTC heaters, and pressure sensors are being rapidly introduced into the upstream and downstream industries of new energy sources such as photovoltaic energy storage, power batteries, motor systems, and charging guns/seats. In the first three quarters, the company's NTC traditional business revenue was 860 million yuan, up 23% year on year; NEV sensor business revenue was 1,358 billion yuan, up 67% year on year.
The intelligent equipment business group achieved high growth: the laser equipment and intelligent manufacturing business achieved revenue of 2,258 billion yuan and net profit of 264 million yuan in the first three quarters of 23 years, an increase of 46% over the previous year. Among them, the intelligent equipment business group's revenue for the first three quarters was 1.27 billion yuan, up 17% year on year, and net profit was 154 million yuan, up 65% year on year. The company's intelligent equipment business group has developed a number of “domestic alternatives, industry-leading, specialized and new” products for NEV tracks, such as automatic welding of electronic trays, high-frequency welding and composite drilling for bumpers, and laser cleaning. Facing the intelligent manufacturing circuit, we launched a “laser+intelligent manufacturing” overall solution for shipbuilding, rail transit, construction machinery and other industries, and achieved large-scale sales in many leading companies. The Precision Systems Business Group's revenue for the first three quarters was 838 million yuan. Although it fell 14%, net profit was 110 million yuan, an increase of 26% over the previous year.
Profit forecast, valuation and rating: The company achieved revenue of 7.208 billion yuan and net profit of 812 million yuan in the first three quarters of 2023. The company is actively expanding the two major fields of new energy and intelligent manufacturing. Considering that the wireless connectivity business is greatly affected by the industry and competition in the low-power laser equipment industry is fierce, net profit due to the reduction in 23-25 years was 9.74 (17% reduction), 13.36 (11% reduction), and 17.02 (9% reduction) billion yuan. The corresponding PE value was 35x/25x/20x. It is optimistic about the company's growth potential in the high-speed optical module and new energy vehicle industry chain, and maintains a “buy” rating.
Risk warning: New energy vehicle-related business development falls short of expectations, and the development of new optical module products falls short of expectations.