Event: the company released its three-quarter report in 2022, with revenue of 262 million yuan (YOY+19.62%), net profit of 45 million yuan (YOY+15.53%), and net profit of 37 million yuan (YOY+23.22%).
The performance is in line with expectations, and the demand for optical communication is growing rapidly. Q3 has a single-quarter revenue of 94 million yuan (YOY+11.09%) and a net profit of 18 million yuan (YOY+11.3%). The rapid growth of the company's revenue is mainly due to the continuous recovery of demand in the optical communications market, the steady implementation of fund-raising projects and the improvement of order delivery capacity, in which the revenue of molded glass aspheric lenses has increased significantly compared with the same period last year. With the new molded aspheric surface repair equipment in place, the related revenue will further grow. At the same time, the increase in income brings scale effect, as well as cost optimization, and the company deducts non-return net profit to achieve rapid growth.
Gross margin is slightly higher than Q2. The company's gross margin rose 0.73 percent compared with the 2022Q2 quarter. We estimate that the main reason is the increase in the proportion of the business structure of optical communications in the Q3 quarter, and the gross profit margin of optical communications services is higher than that of optical fiber laser services.
Set up a Thai subsidiary to further expand overseas business. At the invitation of customer L Company, it is proposed to invest and set up a subsidiary in Thailand with an investment amount of no more than US $7 million or equivalent foreign currency (the project will be divided into two phases, of which the investment of US $2 million equivalent Thai baht in the fourth quarter of 2022 and US $5 million equivalent of Thai baht in the second quarter of 2023).
The purpose of establishing the subsidiary is to further deepen the strategic cooperative relationship with overseas L customers and the ability to cope with changes in the international environment, and to provide supporting products for customers' branches in Thailand. We believe that the company's business has taken an important step forward, L customers for the company's strategic cooperation customers, is expected to further increase the company's revenue.
Actively expand the vehicle business, lidar business in an orderly manner. At present, the main customers are Wesai Technology, Radium God Intelligence, Suiteng Juchuang, Tudatong and other lidar companies. At present, it is mainly for the development of orders, and some downstream lidar customers are making smooth progress in factory inspection, and are expected to be designated by car companies.
We believe that with the continuous development of automobile intelligence, the lidar permeability for ADAS will continue to increase. Yole forecasts shipments of about 200000 units in 2022 and 4.5 million units in 2027, with a compound growth rate of 87.1% from 2022 to 2027. It is estimated that by 2027, the global lidar market is about 6.3 billion US dollars, of which ADAS is 2 billion US dollars. According to China's annual car sales of 22 million vehicles, the current sales penetration of lidar models is less than 1%, and there is huge room for development.
Actively expand the vehicle business, the vehicle HUD project has passed the Bosch certification, in addition, the company is working on the car lens project, vehicle anti-fatigue driving lens business and so on.
Actively reserve AR, lithography machine lens technology, the future can be expected. The company first cooperated with Alphabet Inc-CL C to develop Alphabet Inc-CL C glasses and cut into the AR glasses raceway. at present, it already has technical reserves in the fields of optical waveguide grating and diffraction, and is actively expanding and promoting to downstream AR glasses manufacturers. The company's wide-field-of-view two-dimensional waveguide plate project for AR glasses has been verified, and the holographic diffraction grating project is also in the verification stage. The value of AR glasses accounts for 50% of the whole machine. At present, it has actively cooperated with many domestic and foreign AR glasses manufacturers. Compared with array optical waveguide lenses, diffracted optical waveguide lenses have the advantages of better stability, low cost and strong processability, so they will become the mainstream technology of AR glasses in the future.
In the future, the company will expand the manufacturing capacity of micro-nano processing, which can be used in the optical lens system of lithography machine and help the localization of lithography machine.
Investment advice. The company is committed to building an optical platform company, lidar and AR lens business is an important point, with the lidar volume and the outbreak of AR glasses, will bring great performance flexibility for the company. It is estimated that the income in 2022-2024 is 405 million, 559 million and 732 million, the net profit of homing is 70 million, 112 million and 141 million, and the corresponding PE is 50-31-25.
Continue to recommend and give a "buy" rating.
Risk tips: AR business technology research and development is not as expected; downstream fiber laser manufacturers' competition continues to deteriorate; lidar fixed-point progress is not as expected.