2024Q1 revenue grew steadily, industry recovery led to continuous improvement in performance, and maintained a “buy” rating
The company achieved revenue of 7.745 billion yuan in 2024Q1, +18.94% year over month; net profit to mother of 289 million yuan, -38.65% year on year, -54.21% month on month; net profit of 261 million yuan, -6.71%% year on month, -54.78% month on month; gross profit ratio of 13.60%, -1.20 pcts year on month, -4.03 pcts month on month. We maintain our 2024-2026 performance expectations. We expect net profit to be 23.47/29.93/3.563 billion yuan for 2024-2026, corresponding EPS of 1.37/1.75/2.08 yuan, and the current stock price is 10.7/8.4/7.1 times. The company is a leading global FPC manufacturer with a strategic layout in the two major fields of consumer electronics and automobiles. Along with the gradual recovery of the industry, performance is expected to grow steadily and maintain the “buy” rating.
The new energy business is growing rapidly, and the LED and touch display business continues to pick up the new energy business: the company's 2024Q1 new energy business achieved revenue of about 1,829 billion yuan, +56.46% over the same period last year, including products such as precision manufacturing and soft boards. LED business: The downturn cycle of the 2023H2 industry has bottomed out. The company continued to narrow losses month-on-month by strengthening internal management. In the future, it will continue to improve the product structure, introduce some international customers, increase capacity utilization, and improve business performance. Touch display business: The business began to recover at the end of 2023 and the beginning of 2024. Due to the company's small production capacity and high customer concentration, the company's business recovery rate is slightly slower than the industry trend, but it has gradually returned to the level of normal years, and it is expected that 2024Q3 may improve even better. Looking ahead to 2024Q2, as production capacity slowly releases and climbs, and the industry gradually recovers after the inventory removal cycle ends, the profit situation in the company's related sectors will also gradually improve.
Consumer electronics+automotive two-wheel drive, the company's performance is expected to grow steadily in the automotive business: NEV business revenue is growing year by year, and international and domestic customers have achieved good results. The expected product lines have basically reached fixed points, laying the foundation for subsequent business growth in the automotive sector. FPC: The company gradually acquired the module board business from major customers and promoted the steady growth of this business. In addition, emerging products such as AI and MR have also opened up new incremental space. Hard board: Mainly focused on HDI and multi-layer boards, used in base station communications, servers and switches, automobiles, consumer electronics, etc., and is actively exploring the field of AI servers.
Risk warning: downstream demand falls short of expectations; capacity release falls short of expectations; customer acquisition falls short of expectations.