Investment proposal: As the recovery of the 3C and lithium battery industry fell short of expectations, the 24-25 EPS was reduced to 2.46/3.25 yuan (previous value: 4.07/5.23 yuan), and the additional 26-year EPS was 4.13 yuan. Referring to comparable companies, and considering that the company is a leader in core components of machine vision and continues to expand new tracks, the company was given 36 times PE in 24 years, corresponding to a target price of 88.56 yuan (previous value of 131.85 yuan), maintaining an increase in holdings rating.
Performance fell short of expectations, with significant month-on-month improvement in 24Q1. The company achieved revenue of 944 million yuan/ -17.27% in 2023, and net profit of 194 million yuan/ -40.37% to mother. Single Q4 achieved revenue of 98 million yuan/year over year -57.56% /month on month -56.81%, net profit to mother of -0.11 million yuan/year over year -124.6% /month on month. In 2023, the gross profit margin was 64.23% /-1.97pct, and the net profit margin to mother was 20.52% /-7.95pct. Affected by the decline in 3C and lithium batteries and the company's increased investment in R&D, etc., the company's profitability declined significantly in '23. 24Q1 achieved revenue of 227 million yuan/-9.53% YoY +131.6%, net profit to mother of 57 million yuan/YoY -12.67% /month-on-month reversal of losses.
3C and lithium batteries are sluggish, and the company is under pressure in the short term. In '23, the company's 3C revenue was 580 million yuan, yoy -9.34%; lithium battery revenue was 260 million yuan, yoy -34.97%. The company's two main businesses all experienced varying degrees of decline due to poor downstream demand and the backward shift in customer capital expenditure. In response to the decline in the industry, while deepening and refining the main business, the company promoted product standardization while actively expanding the customer base.
Maintain high R&D investment and forward-looking layout for the future. The company invested 202 million yuan in R&D in '23, accounting for 21.4% of revenue. The company continues to expand its hardware product line, such as extending from 2D to 3D, and expanding the product line of barcode readers, cameras, and sensors. In the software section, the company released DeepVision 3 to accelerate the application of AI in the field of vision.
Risk warning: Downstream applications and new product expansion fall short of expectations, and industry demand recovery falls short of expectations.