Key points of investment
24Q1 revenue reached a record high. In the consumer electronics and automotive sectors, the company achieved revenue of 3.129 billion yuan in 2023, an increase of 5.37% over the previous year; net profit to mother was 356 million yuan, a year-on-year decrease of 19.64%. The 24Q1 company achieved revenue of 1,040 million yuan, an increase of 68.77% over the previous year, and realized net profit of 162 million yuan, an increase of 244.43% over the previous year. Benefiting from the recovery of the consumer electronics market and the increase in NEV sales, the company's 24Q1 revenue reached a record high. The company's performance is expected to continue to grow rapidly as NEV sales continue to grow and the domestic replacement process for parts is accelerated.
The consumer electronics market is recovering, and BTB products are expected to contribute new volume. According to TechInsights and Canalys data, global mobile phone shipments reached 326 million units in 23Q4, an increase of 8.5% over the previous year, and the consumer electronics market picked up. The company's RF connectors have become suppliers to global first-tier customers such as Huawei, Xiaomi, and Samsung, and related businesses are expected to continue to grow in the context of the recovery of the consumer electronics market.
RF BTB products are highly correlated with the advancement of 5G millimeter waves, and demand for BTB products is expected to grow rapidly as 5G applications grow dramatically. The company's RF BTB products have been used in batches for core customers, while continuing to expand the introduction of BTB products in leading customers. Currently, the expansion is relatively smooth, and it is expected to contribute additional volume in the future.
High-frequency high-speed connectors continued to grow, and the automotive connector business entered a rapid growth trajectory. As the level of intelligence and electronics of new energy vehicles accelerated, the industry boom was high. The company's automobile connector shipments continued to grow, and revenue grew rapidly over the same period last year. In '23, the company's automotive connector business achieved revenue of 823 million yuan, an increase of 60% over the previous year. The company's automotive connector business binds leading domestic automakers with leading overseas TIER1 companies. With the high sales volume of leading car companies at home and abroad and the continuous expansion of the company's overall production capacity for automotive high-frequency and high-speed connectors and components, the company's automotive connector business is expected to continue to grow rapidly.
Profit forecasting and valuation
We expect the company's 2024-2026 revenue to be 43.2, 5.68 billion yuan, and 7.29 billion yuan, respectively, with year-on-year growth rates of 38.1%, 31.4%, and 28.3%; net profit to mother will be 6.6, 8.6, and 1.12 billion yuan respectively, with year-on-year growth rates of 84.0%, 31.5%, and 30.4%, corresponding PE 28, 22, and 17 times, respectively, maintaining the “buy” rating.
Risk warning
Demand in the consumer electronics market falls short of expectations, sales of new energy vehicles fall short of expectations, etc.