The 2023 results are under pressure in the short term. The company continues to be optimistic that the company will release its 2023 annual report, achieving operating income of 944 million yuan, a year-on-year decrease of 17.27%; achieving net profit attributable to shareholders of listed companies of 194 million yuan, a year-on-year decrease of 40.37%; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses of 163 million yuan, a year-on-year decrease of 45.41%; and basic earnings per share of 1.5858 yuan, a year-on-year decrease of 40.41%.
The company released its 2024 quarterly report, achieving operating income of 227 million yuan, a year-on-year decrease of 9.53%; net profit attributable to shareholders of listed companies of 573,019 million yuan, a year-on-year decrease of 12.67%; realized deducted non-net profit of 489.13,500 yuan belonging to shareholders of listed companies, a year-on-year decrease of 16.65%; and basic earnings per share of 0.4688 yuan, a year-on-year decrease of 12.78%.
Endogenous+epitaxial, product line continuous improvement
With machine vision as the core, the company is committed to providing customers with intelligent and cutting-edge automation products and solutions to meet the needs of the industrial sector for efficient and accurate automation systems. The company added a new product line:
On the one hand, the company continues to focus on expanding product lines such as sensors, barcode readers, and homemade cameras; on the other hand, the company is also experimenting with epitaxial methods to absorb mature product lines to help future development.
The acquisition of linear motor assets to further enhance the company's overall competitiveness issued an announcement on November 30, 2023. The company plans to pay cash to acquire 51% of the shares of the target company by transferring shares from existing shareholders of Dongguan Tailai Automation Technology Co., Ltd. and increasing capital to lay out the linear motor business. Linear motors can be widely used in automated production lines, robots, precision processing equipment, etc., and are an indispensable part of modern industrial automation.
Benefiting from the recovery of consumer electronics, the traditional main business is expected to usher in growth since 2023. Affected by factors such as the global economic downturn and geopolitics, the consumer electronics industry as a whole is sluggish. With the release of a series of new products and accelerated application of new technologies by major terminal brands in the second half of '23, terminal demand showed signs of recovery, and the industry chain moved from active inventory removal to passive inventory removal.
According to the Canalys research report, in the fourth quarter of 2023, global smartphone shipments rose 8% year over year to reach 319 million units, ending the slump of the past nine consecutive quarters, which indicates that the overall market is entering a steady recovery.
Investment advice
We are optimistic about the recovery of the consumer electronics industry, which has led to a steady increase in the company's performance. The revised profit forecast is: 2024-2026 operating income is 10.91/13.08/1,587 billion yuan (the value before 2024-2025 was 18.39/2,385 billion yuan); 2024-2026 forecast net profit to mother is 2.73/342/420 million yuan, respectively (the value before 2024-2025 was 449/559 million yuan); EPS corresponding to 2024-2026 2.24/2.80/3.44 yuan. The PE corresponding to the company's current stock price is 31/25/20 times, maintaining an “incremental” investment rating.
Risk warning
1) Breakthroughs in technology research and development fall short of expectations; 2) downstream demand falls short of expectations; 3) loss of core technical personnel; 4) large fluctuations in raw material costs affect gross profit margin; 5) Market competition increases the risk of affecting gross margin.