Huichuangda released the 2023 Annual Report and the 2024 First Quarter Report: In 2023, the company achieved operating income of 1,356 billion yuan, a year-on-year increase of 63.85%; realized net profit to mother of 94 million yuan, a year-on-year decrease of 26.75%; and realized deduction of non-net profit of 77 million yuan, a year-on-year decrease of 37.58%. In 2024, Q1 achieved operating income of 288 million yuan, a year-on-year increase of 39.26% and a decrease of 38.99%; realized net profit to mother of 0.13 million yuan, an increase of 26.58% year-on-year and a decrease of 64.90% month-on-month; realized deducted non-net profit of 0.1 billion yuan, an increase of 154.32% year-on-year and a decrease of 67.95% month-on-month.

Key points of investment

Revenue increased in 2023. Diversified business structures helped increase performance in 2023. The company's operating income increased significantly, and net profit to mother declined, mainly due to increased operating costs and increased expenditure. In terms of business structure, sales revenue of light guide structural components was 404 million yuan, down 19.18% year on year; signal transmission components and components business achieved sales revenue of 521 million yuan, up 376.88% year on year; OEM business achieved revenue of 319 million yuan, up 124.86% year on year; and new energy structural component business achieved sales revenue of 16 million yuan. We believe that the company's diversified business structure and innovative development strategy will provide a strong impetus for continued revenue growth.

Deeply involved in the backlight module industry and actively expand business in the field of new energy Backlight modules are component products with light guide films as the core component. They can be divided into backlight modules for input devices, backlight modules for display equipment, and modules for lighting equipment.

In the field of input device backlight modules, the company's products are currently mainly used for laptop keyboard backlighting. In terms of display equipment backlight modules, the company continues to lay out mini LED backlight product applications, focusing on developing automotive mini LED products. The value of a laptop miniLED backlight module is 2-3 times that of traditional products. Currently, the company has officially delivered orders for miniLED backlight modules. According to Arizton statistics, the global MiniLED market will expand to US$2.32 billion in 2024, with a CAGR of 147.92% in 2018-2024. In the field of lighting equipment modules, the company continues to broaden the application fields of products and seek new growth points through continuous technological innovation. With the development of LED technology and the reduction of costs, the pace of LED entering the field of general lighting is accelerating, and the LED display industry is also gradually incubating new LED display products. According to the Institute of Advanced Industrial Research, the market size of China's LED display industry is expected to continue to grow to 82.5 billion yuan in 2025. In addition, Huichuangda released the 2023 Annual Report and the 2024 First Quarter Report: In 2023, the company achieved operating income of 1,356 billion yuan, a year-on-year increase of 63.85%; realized net profit to mother of 94 million yuan, a year-on-year decrease of 26.75%; and realized deduction of non-net profit of 77 million yuan, a year-on-year decrease of 37.58%. In 2024, Q1 achieved operating income of 288 million yuan, a year-on-year increase of 39.26% and a decrease of 38.99%; realized net profit to mother of 0.13 million yuan, an increase of 26.58% year-on-year and a decrease of 64.90% month-on-month; and realized deducted non-net profit of 0.1 billion yuan, a year-on-year increase of 154.32% and a decrease of 67.95% month-on-month.

Key points of investment

Revenue increased in 2023. Diversified business structures helped increase performance in 2023. The company's operating income increased significantly, and net profit to mother declined, mainly due to increased operating costs and increased expenditure. In terms of business structure, sales revenue of light guide structural components was 404 million yuan, down 19.18% year on year; signal transmission components and components business achieved sales revenue of 521 million yuan, up 376.88% year on year; OEM business achieved revenue of 319 million yuan, up 124.86% year on year; and new energy structural component business achieved sales revenue of 16 million yuan. We believe that the company's diversified business structure and innovative development strategy will provide a strong impetus for continued revenue growth.

Deeply involved in the backlight module industry and actively expand business in the field of new energy Backlight modules are component products with light guide films as the core component. They can be divided into backlight modules for input devices, backlight modules for display equipment, and modules for lighting equipment.

In the field of input device backlight modules, the company's products are currently mainly used for laptop keyboard backlighting. In terms of display equipment backlight modules, the company continues to lay out mini LED backlight product applications, focusing on developing automotive mini LED products. The value of a laptop miniLED backlight module is 2-3 times that of traditional products. Currently, the company has officially delivered orders for miniLED backlight modules. According to Arizton statistics, the global MiniLED market will expand to US$2.32 billion in 2024, with a CAGR of 147.92% in 2018-2024. In the field of lighting equipment modules, the company continues to broaden the application fields of products and seek new growth points through continuous technological innovation. With the development of LED technology and the reduction of costs, the pace of LED entering the field of general lighting is accelerating, and the LED display industry is also gradually incubating new LED display products. According to the Institute of Advanced Industrial Research, the market size of China's LED display industry is expected to continue to grow to 82.5 billion yuan in 2025. In addition, Huichuangda released the 2023 Annual Report and the 2024 First Quarter Report: In 2023, the company achieved operating income of 1,356 billion yuan, a year-on-year increase of 63.85%; realized net profit to mother of 94 million yuan, a year-on-year decrease of 26.75%; and realized deduction of non-net profit of 77 million yuan, a year-on-year decrease of 37.58%. In 2024, Q1 achieved operating income of 288 million yuan, a year-on-year increase of 39.26% and a decrease of 38.99%; realized net profit to mother of 0.13 million yuan, an increase of 26.58% year-on-year and a decrease of 64.90% month-on-month; and realized deducted non-net profit of 0.1 billion yuan, a year-on-year increase of 154.32% and a decrease of 67.95% month-on-month.

Key points of investment

Revenue increased in 2023. Diversified business structures helped increase performance in 2023. The company's operating income increased significantly, and net profit to mother declined, mainly due to increased operating costs and increased expenditure. In terms of business structure, sales revenue of light guide structural components was 404 million yuan, down 19.18% year on year; signal transmission components and components business achieved sales revenue of 521 million yuan, up 376.88% year on year; OEM business achieved revenue of 319 million yuan, up 124.86% year on year; and new energy structural component business achieved sales revenue of 16 million yuan. We believe that the company's diversified business structure and innovative development strategy will provide a strong impetus for continued revenue growth.

Deeply involved in the backlight module industry and actively expand business in the field of new energy Backlight modules are component products with light guide films as the core component. They can be divided into backlight modules for input devices, backlight modules for display equipment, and modules for lighting equipment.

In the field of input device backlight modules, the company's products are currently mainly used for laptop keyboard backlighting. In terms of display equipment backlight modules, the company continues to lay out mini LED backlight product applications, focusing on developing automotive mini LED products. The value of a laptop miniLED backlight module is 2-3 times that of traditional products. Currently, the company has officially delivered orders for miniLED backlight modules. According to Arizton statistics, the global MiniLED market will expand to US$2.32 billion in 2024, with a CAGR of 147.92% in 2018-2024. In the field of lighting equipment modules, the company continues to broaden the application fields of products and seek new growth points through continuous technological innovation. With the development of LED technology and the reduction of costs, the pace of LED entering the field of general lighting is accelerating, and the LED display industry is also gradually incubating new LED display products. According to the Institute of Advanced Industrial Research, the market size of China's LED display industry is expected to continue to grow to 82.5 billion yuan in 2025. In addition, management is also actively promoting the company's expansion from the consumer electronics sector to the field of CCS and FPC modules for new energy power batteries and energy storage battery systems. The company invested 565 million yuan in CCS and FPC module construction projects for power batteries and energy storage battery systems, with an annual design capacity of 12 million CCS modules and 39 million FPC modules.

Waterproof light touch switches are widely used, and the precision connector business is expanding in multiple directions

As consumer requirements for the user experience of electronic products increase, the rise of new high-end smartphones and wearable devices has promoted the widespread application of ultra-compact waterproof tact switches in the market. The company's products are mainly used in the field of smart terminals, including Click Pad buttons, smart wearable devices, mobile phone main and side keys, motorcycle joystick buttons, household appliance control panels and remote controls, gamepads, etc. In addition, the wearable device market will become an important market for the company's ultra-compact waterproof tact switch products. With the spread of AI, VR, and AR technologies, the rich functionality of wearable device products and the expansion of application scenarios have driven the growth in market demand. Furthermore, benefiting from the development of industries such as new energy vehicles, data communications, computers and peripherals, and consumer electronics, the global connector market is expanding.

According to Bishop & Associates, China's connector market size in 2022 was $26.5 billion, and the 2013-2022 CAGR was 8.14%. The company continues to consolidate its market share in the field of precision switches and precision connectors. Its main products include precision connectors such as precision Type-C connectors, SIM card and memory card connectors, HDMI data transmission connectors, audio connectors, high voltage and high current connectors, etc., as well as products such as multi-function shrapnel and precision electromagnetic shielding components. Downstream customers mainly include companies such as Audio Communications Holdings, Huawei Technology, Xiaomi, Honor, Lenovo Group, ZTE, BYD, and Kaivo.

Profit forecasting

The company's revenue for 2024-2026 is 26.04 billion yuan, 34.37 billion yuan, and 4.434 billion yuan respectively, and EPS is 1.51, 1.97, and 2.55 yuan respectively. Based on the further increase in AI PC penetration rate, mini backlit keyboards can empower the company's performance, and with the launch of new global folding screens and new domestic high-end flagship models, the company's performance is expected to be released quickly, giving it a “buy” investment rating.

Risk warning

Industry competition heightens risks; company product updates and iterations fall short of expectations; downstream consumer electronics industry is less prosperous than expected.