The company issued a performance forecast that 2022 net profit increased by 299.5% to 379.7% compared with the same period last year. The company issued a 2022 performance forecast: 2022 realized income of 5.896 billion yuan to 6.196 billion yuan, year-on-year + 22.5% net profit of 28.7%; net profit of 160,139 million yuan, compared with the same period of last year, + 299.5% net profit of 379.7%; deduction of non-return net profit of 135million million yuan, year-on-year + 1281% net profit 1609%. Corresponding to the 4Q22 income of 1.295 billion yuan to 1.595 billion yuan, compared with the same period last year, the year-on-year net profit was-9.38 million yuan to + 22.78 million yuan, the year-on-year loss narrowed by 88% to turn into profit; after deducting the non-return net profit of RMB 14.85 million to + 17.31 million yuan, the year-on-year loss narrowed by 88% to turn into profit. The company's performance is in line with our expectations.
Pay attention to the main points
4Q22 overseas demand is under pressure, and the company's revenue performance is stronger than the industry: 1) under the influence of high base and high inflation, overseas 4Q22 audio demand is under pressure. The company's customer LOGI.NASDAQ FY4Q22 revenue is-22% year-on-year, of which audio and wearable devices sector revenue is-34% year-on-year, mobile speaker sector revenue is-32% year-on-year, and another customer Sonos (SONO.NASDAQ) FY4Q22 revenue is-12%. 2) in the face of the sluggish overall demand in the industry, the company independently developed active noise reduction headphones, panoramic echo wall and other products to actively respond, and a number of new products adopted dynamic sound effect algorithms to further extend the battery life while improving sound quality.
The VR/AR track is picking up and business is advancing in an orderly way: 1) according to IDC's forecast, global VR head shipments will reach 12.44 million units in 2023, + 31% year-on-year, and 27.56 million units in 2026. 2) according to the company announcement, the company achieves stable supply of VR leading enterprises such as M customers and P customers, and actively expands the OEM business of VR/AR; during the performance period, the company maintains the growth trend of customers and orders, and further improves the market share of JDM and ODM high-end machine products. The sales income of 1-3Q22's VR/AR business is 162 million yuan, accounting for 3.51% of the operating income.
The automobile business continues to break through, slightly benefiting from exchange rate factors: 1) on the automobile side, according to the announcement of the company, the car speaker business has made a breakthrough, and the company has obtained a number of fixed points of multiple models for domestic new energy vehicle head customers. at the same time, it has also obtained orders from foreign automobile customers. 2) in terms of exchange rate, the exchange rate of 1H22 US dollar rose 5.0% against RMB and rose 9.1% for the whole of 2022. According to the company's medium report, the exchange gain of 1H22 Company is 30 million yuan. We estimate that exchange rate changes will have a positive impact on the company's full-year earnings.
Profit forecast and valuation
We keep our profit forecast basically unchanged for 2022-2024. Maintain an industry rating that outperforms. The current share price corresponds to a price-to-earnings ratio of 25.6 times 2024 / 20.7 times earnings for 2023 Universe. Due to the upward valuation hub of the VR industry and the continued steady development of the company's VR business, we have raised our target price by 13% to 18.54 yuan, corresponding to a price-to-earnings ratio of 33 times earnings for 2023 Universe in 2024, which is 30% higher than the current share price.
Risk.
New business development is less than expected risk, overseas demand fluctuation risk, exchange rate risk.