Incident: On April 15, the company released its 2024 quarterly report. In the first quarter, it achieved revenue of 1,259 million yuan, an increase of 22.86% over the previous year; realized net profit of 170 million yuan, an increase of 111.26% over the previous year; and realized net profit without return to mother of 158 million yuan, an increase of 156.73% over the previous year.
The business reached a record high in a single month in January, and profitability continued to improve:
The company's business in the field of precision electronic components and new applications developed smoothly, market orders increased, and the business reached a record high in a single month in January. After being briefly affected by the Spring Festival holiday in February, the business resumed growth in March. By application area, with the exception of power management products, which were basically flat year on year, all other products achieved high year-on-year growth, with 24Q1 automotive electronics or energy storage products reaching 190 million yuan (yoy +93.42%, qoq -30.81%), revenue from ceramics, PCBs and other products was 122 million yuan (yoy +26.82%, qoq +83.77%), and signal processing product revenue was 537 million yuan (yoy +27.87%, qoq -7.31%). The company's capacity utilization rate continued to increase, leading to an increase in marginal profit and labor efficiency. 24Q1 gross margin reached 36.95% (yoy+4.77pct, qoq-0.01pct), and net margin reached 15.65% (yoy+5.84pct, qoq+1.59pct), all with significant year-on-year increases.
New products such as LTCC have entered the release period, and emerging businesses have been successfully developed:
The company focuses on the precision electronic components industry. Product planning mainly focuses on the four major fields of “magnetic devices, microwave devices, sensing and sensitive devices, and precision ceramics”, and strategically lays out emerging industries such as automotive electronics, energy storage, photovoltaics, big data, industrial control, Internet of Things, and module modules. According to the Investor Relations Activity Record Form, a large number of new products laid out by the company in advance have entered the release stage. Some high-end new products, such as LTCC devices and integrated power inductor series, have strong customer demand, product supply is in short supply, and production capacity utilization has remained at a high level, and it is expected that they will continue to be released in the next few years. According to the annual report, the company's emerging business continues to advance. (1) Automotive electronics: The company's automotive electronics products are used in a wide range of fields, covering automotive battery management systems, intelligent driving systems, vehicle charging systems (OBC), vehicle networking, headlight control systems, motor management systems, body control systems, smart cockpits, thermal management systems, etc. At present, the company has comprehensively promoted the development and supply layout of various categories of automotive electronics within the group company. The depth and breadth of cooperation with major strategic customers continues to increase, and new projects for high-end customers continue to be promoted smoothly. (2) Photovoltaic energy storage: The company has been working in the field of photovoltaic energy storage represented by microinverters for many years. It has now obtained recognition from domestic and foreign industry benchmark companies, and has successfully developed special new high-power components to prepare for the rapid development of the industry after breakthroughs. (3) Data center: The company's products can continue to meet the development needs of high-end customers and have been continuously recognized by high-end customers. Various electronic products related to information interaction, processing, and computing will bring new incremental space and application scenarios to the company. (4) Fine ceramics: The company has continued to research ceramic powders and process technology for many years. It has actively completed the market layout and technical layout of related products in the early stages, and maintained in-depth development cooperation with many well-known enterprises at home and abroad on future projects. The company's ceramic products rank among the highest in the market share in the smart wearable field. (5) Module module: Recognized by important customer groups at home and abroad, the product share is expected to continue to increase.
Investment advice:
We expect the company's revenue for 2024-2026 to be 6.080 billion yuan, 7.240 billion yuan and 8.748 billion yuan respectively, with net profit attributable to mother of 880 million yuan, 1,110 billion yuan, and 1,390 billion yuan respectively, and PE of 23.9 times, 18.9 times, and 15.1 times, respectively. Taking into account the electronic components market sentiment, the company's market position and business development, combined with the Wind industry's unanimous expectations, the company was given 30 times PE in 24 years, corresponding to a target price of 32.73 yuan, to maintain a “buy-A” investment rating.
Risk warning: downstream demand falls short of expectations; emerging market expansion falls short of expectations; domestic substitution falls short of expectations.