Lixun Precision published its annual report for the year 23 and the quarterly report for the year 24. In '23, the company achieved operating income of 231.905 billion yuan, an increase of 8.35%; net profit to mother of 10.953 billion yuan, an increase of 19.53%; net profit after deducting net income of 10.186 billion yuan, an increase of 20.65% over the previous year. The company achieved operating income of 52.407 billion yuan in 24Q1, up 4.93% year on year; net profit to mother of 2,471 billion yuan, up 22.45% year on year; net profit after deducting back to mother was 2.283 billion yuan, up 23.23% year on year.
The company predicts steady growth in mid-report performance, and multiple businesses will continue to grow. According to the semi-annual performance forecast, the company expects net profit from mother to be 5.227 billion yuan to 5.445 billion yuan for the first half of '24, an increase of 20% to 25%; net profit after deducting net profit of 47.89 to 5,077 billion yuan, an increase of 15.28% to 22.20% year on year. The company's consumer electronics products have evolved towards personalization and intelligence; demand for various types of hardware such as optical connections, electrical connections, cooling, and power supplies in data centers has risen rapidly; and new energy vehicles have shown strong competitiveness under the continuous optimization of smart cockpit applications and intelligent driving technology.
With consumer electronics as the core, there is plenty of momentum for growth in businesses such as communications and automobiles. The company's revenue for consumer electronics/communications/automobile/computer interconnection products and precision components increased by 9.75%, 13.28%/50.46%/-33.58%, respectively, year-on-year in '23. In terms of consumer electronics, the company continues to take advantage of vertical integration and cost control, and has steadily improved operating performance; in terms of communications, the company is deeply involved in electric connections, optical connections, air cooling/liquid cooling, power management, radio frequency and other products, and collaborates with leading chip manufacturers to jointly formulate next-generation high-speed connection standards such as 800G and 1.6T for mainstream data centers and cloud manufacturers; in the automotive sector, the company has deep strategic cooperation with leading domestic and foreign OEMs and automobile brands for high/low voltage wiring harnesses, high-speed wiring harnesses, charging guns, car connectors, smart cockpit controllers, LCD meters, and 3-in-1 motor systems, AR Products such as HUD and DMS open up a broad market space.
Profit forecast and investment advice: The company's EPS is expected to be 1.91/2.38/2.87 yuan/share from 24 to 26, respectively. Considering the company's leading position and reference to comparable companies, the company is given a PE valuation of 20 times in 24 years, corresponding to a reasonable value of 38.21 yuan/share, maintaining a “buy” rating.
Risk warning: Product sales fall short of expectations, assembly business progress falls short of expectations, and industry competition increases risk.