The company announced its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 3.257 billion yuan, or -15.28% year on year, and realized net profit of 0.27 million yuan, -82.99% year on year; in the first quarter of 2024, revenue of 909 million yuan, +30.88% year over year, achieved net profit of 14 million yuan, +149.78% year on year. As a leading company in notebook structural components, on the one hand, the company is expected to benefit from the recovery in the notebook industry's boom stimulated by AI PCs. On the other hand, the company actively promotes the “two-wing” layout of communication electronics and new energy vehicles to open up room for growth and maintain a “buy” rating.
Key points to support ratings
Affected by declining demand in the downstream laptop industry, the company's 2023 performance was under pressure. Since the second half of 2022, as global demand has slowed, the laptop industry has been impacted by a short-term decline in demand, which was transmitted to the company through the industrial chain, causing pressure on the company's performance, resulting in a year-on-year decline in operating income and net profit to the mother. By product, structural component module revenue was 2,789 million yuan, -12.84% year on year; communication electronics revenue was 257 million yuan, -23.58% year on year; mold revenue was 170 million yuan, or -31.02% year on year. In terms of profitability, the company's gross margin for 23 years was 15.28%, -1.67pct year on year, and the net margin was -0.06%, and -3.55pct year on year.
AI PCs spurred demand for switches, the laptop industry's boom picked up, and the company's performance recovered. The laptop renewal cycle is imminent. Combined with the launch of new AI PC products, the laptop industry is recovering. According to Techinsights data, the 2024Q1 global laptop shipment volume is 46.1 million units, +7% over the same period last year.
Against the backdrop of a recovery in the notebook industry's boom, the company's performance recovered. In the first quarter of 2024, it achieved revenue of 909 million yuan, +30.88% year over year, and realized net profit of 0.14 billion yuan, +149.78% year on year, gross margin of 14.07%, +0.14pct year on year, and net interest rate of 0.58% and +5.62 pct year on year.
Seize the opportunity to lay out the NEV structural parts business and create a second growth curve. Automotive electronics are converging with consumer electronics, and both are showing the characteristics of being lightweight, intelligent, and fashionable. As a result, consumer electronics structural component manufacturers are currently facing a historic opportunity for epitaxial development into the field of automotive electronic structural components. At present, the company has successfully broken through “semi-solid injection molding” technology, and can start mass production of electronic structural parts for new energy vehicles with technical advantages and cost advantages. The company's business extends outward to the automotive electronic structural parts industry, fully in line with the development trend of automobile electrification, intelligence and weight reduction. The future development of the NEV electronics sector is expected to become a new growth point for the company.
valuations
According to the company's various business conditions, we adjusted the company's profit forecast. We expect to achieve operating income of 39.65/48.80/5.625 billion yuan in 2024-2026, achieve net profit of 1.57/2.65/377 million yuan, EPS is 0.36/0.60/0.86 yuan, and the current stock price corresponds to PE 24.8/14.7/10.3 times. As a leading company in notebook structural components, the company is expected to benefit from a recovery in the notebook industry's prosperity stimulated by AI PC. On the other hand, the company is active Promote the “two-wing” layout of communications electronics and new energy vehicles to open up room for growth and maintain a “buy” rating.
The main risks faced by ratings
The risk that downstream demand falls short of expectations; the risk of new business development falling short of expectations; the risk of increased market competition.