Incident: The company released its 2022 performance report. It achieved revenue of 768 million yuan in 2022, a decrease of 0.78% over the previous year; the net profit of the mother was 139 million yuan, a year-on-year decrease of 12.97%.
The downturn in the consumer electronics market+rising R&D expenses and inventory prices are poised to drag down the company's performance: according to performance report estimates, Q4 achieved revenue of 153 million yuan in '22, -23.1% year on year, +7% month-on-month; Guimo's net profit - 16 million yuan, a loss over the same period last month. Due to the impact of the overall poor performance of the consumer electronics market, the company's performance in the second half of the year in particular was affected to a certain extent. At the same time, there is also strong pressure on the cost side of Q4. R&D expenses in fiscal year 22 increased by 43,73442 million yuan compared to the previous year; it is estimated that 47.4675 million yuan will be calculated for inventory price reductions in '22; the impact of share payment fees on the company's net profit is estimated to be 154.4824 million yuan, a significant increase over 93,300 yuan of amortized share payment expenses in the same period of the previous year.
Under the downward cycle of consumer electronics, customer resource advantages have continued to be consolidated: since the company officially entered Samsung Electronics' supplier system in 2010, competed with well-known international companies such as TI in international business, and accumulated a great deal of development experience. With outstanding product performance and stable product quality, the company has maintained good cooperative relationships with customers such as Samsung and Xiaomi. The field of cooperation has gradually expanded from mobile phones and wearable devices to business segments such as home appliances and automotive electronics, forming a good customer advantage. We believe that with the moderate recovery of the consumer electronics market, the company's main business products such as LDO and OVP are expected to improve marginally.
Continuously expand categories and downstream applications to enter BYD's supply chain. The company actively continues to expand its categories around major customers, and the field of cooperation has gradually expanded from mobile phones and wearable devices to business segments such as home appliances and automotive electronics. In the first half of the year, the company actively carried out product and market layout to expand the automobile and new energy markets. It has now successfully entered the BYD supply chain.
Adverse influencing factors such as the epidemic have been eliminated and the policy implementation period has entered, and the electronic detonator business is expected to expand rapidly in '23.
In December 2018, the Ministry of Public Security and the Ministry of Industry and Information Technology issued a notice requiring electronic detonators in 2022 to achieve the goal of full use. Although the penetration rate of electronic detonators increased rapidly in '22 due to factors such as the epidemic, overall industrial demand for detonators was under pressure. Looking ahead to 23 years, we believe that the electronic detonator industry will benefit deeply from strong policy-driven substitution, improved prosperity in the civilian explosion industry, and a significant increase in value. The intelligent networking delay management chip developed by the company is mainly used in fields such as digital electronic detonators, and is expected to bring greater performance flexibility to the company's performance.
Profit forecasts, valuations and ratings: The implementation of the company's electronic detonators is expected to accelerate further, the automotive and digital power markets are expected to become new growth points, and the consumer electronics business is also expected to reverse its predicament. We continue to be optimistic about the company's development potential, but considering the negative impact of the downturn in consumer electronics sentiment, the net profit forecast for 22-24 was lowered from 2.7/35/ 40 million yuan to 1.4/23/31 billion yuan. The adjustment range was -48%/-34%/-25%. The corresponding PE was 47/28/21X respectively, taking into account the company's valuation level and business development prospects, maintaining the “buy” rating.
Risk warning: The recovery in consumer electronics sentiment fell short of expectations, simulating a worsening competitive pattern in the industry.