The collaborative development of general lighting+vehicle lighting has gradually increased the automotive lighting business. The company was founded in 1996 and initially focused on the field of general lighting. The automotive lighting business was officially launched in 2018, and the automotive business development strategy focusing on “vehicle controller+vehicle lighting” was clarified in 2021. Currently, the company's business continues to develop steadily.
In 2023, the company achieved operating income of 4.697 billion yuan, an increase of 0.86% over the previous year, and achieved net profit of 376 million yuan to mother, an increase of 10.31% over the previous year. Among them, the automotive business achieved revenue of 624 million yuan, an increase of 43.74% over the previous year, and achieved net profit of 40 million yuan.
The general lighting industry has entered a period of integration, and the company's competitive advantage continues to increase. China is the world's largest exporter of LED lighting products. According to Huajing Industry Research Institute, in 2022, China's LED lighting product exports will account for 75% of the global consumer market. In the LED lighting industry, general lighting is the main application area. Currently, the competitive landscape in the lighting industry is relatively scattered. According to the company's 2023 annual report, there are about 30,000 downstream application companies in the domestic lighting industry, and there are more than 3,500 enterprises above scale, but there are few companies with annual sales exceeding 5 billion yuan. As domestic lighting companies continue to reduce costs and increase efficiency, and gradually catch up with leading foreign investors with advantages such as cost, scale and price, international lighting giants have gradually divested their lighting manufacturing business; domestic small and medium-sized enterprises are facing pressure such as supply chain stability, channel changes, and continuous profit compression, and are being cleared at an accelerated pace; the share of leading domestic enterprises with supply chain advantages, manufacturing advantages and financial strength is expected to increase, and the company's competitive advantage continues to increase.
The automotive business focused on “vehicle controller+vehicle lighting”, and the sales scale grew rapidly. The company is developing steadily in the automotive field using in-vehicle controllers as a fulcrum, while actively expanding into the field of automotive lighting structural components and BMS. Currently, the company has established good cooperative relationships with companies such as Panasonic, Huayu Vision, Wanxiang, Marelli, Zero Run, and Hella, and continues to receive new project targets. The terminal brands involved include Porsche, Audi, Volkswagen, Nissan, Daihatsu, Toyota, Ideal, Guangzhou Automobile, Zero Run, Changan, and Geely. According to the company's announcement, the company's automotive business achieved revenue of 624 million yuan in 2023, an increase of 43.74% over the previous year, and the business continued to grow rapidly.
Profit forecast and investment advice: As a leader in general lighting, the company is expected to gain greater advantages in the context of industry clean-up, and the company is actively developing a new growth curve for the automotive business, and the business scale is expected to continue to grow. We expect the company's net profit to be 4.54, 5.62, and 689 million yuan respectively in 2024-2026, and the corresponding PE will be 12.95, 10.46, and 8.54 times, respectively, covered for the first time, and given a “buy” rating.
Risk warning: risk of vicious competition in the market, risk of shortage of raw materials and price fluctuations, risk of exchange rate fluctuations, risk of logistics instability.