Main points of investment
Fine management is expected to improve profitability, and there are great prospects in overseas markets: Skyworth Group Co., Ltd. was established in 1988, mainly engaged in multimedia business, intelligent system technology business, new energy, intelligent electrical appliances business, modern service business and other five major businesses, accounting for 44.2% of the revenue from January to September 2022, accounting for 44.2%, 23.4%, 20.3%, 8.8%, 3.3%, respectively. The overall turnover of 2022Q3 Group was 38.419 billion yuan, an increase of 7% over the same period last year, of which the turnover of intelligent TV system products (China market) was 6.98 billion yuan, down 21.8% and 7.8% respectively, and the turnover of intelligent TV system products (overseas markets) was 6.137 billion yuan, down 15.7% from the same period last year, but sales increased by 14.7%. The turnover of Chinese mainland market / overseas market of intelligent system technology business is 5.168.18 billion yuan, an increase of 5.6% and 37.7% over the same period last year. Benefiting from the opportunities brought about by the global development of digital economy, set-top box business is in Europe, Africa and other regions, while broadband network connection products are steadily supplied in bulk and continue to grow in India, Southeast Asia and Europe. 2022Q1-3, with a gross profit margin of 15.7%, decreased 0.6pct compared with the same period last year, mainly due to the electronics industry increasing inventory levels and compressing gross margin space in response to the impact of the epidemic on the global supply chain, as well as rising pressure on raw material costs; at the same time, the gross profit margin of the new energy business is lower than that of other sectors of the group, and the sharp increase in sales will lead to a slight drop in the group's overall gross profit margin.
The rapid growth of household photovoltaic business has opened the second growth curve: the proportion of the group's new energy business in operating income has increased from 8.1% of 2022Q1 in 2021 to 17.3% of 2022H1 to 20.3% of 2022Q1-3. The total installed scale of the Group's distributed photovoltaic power stations is one of the leaders in the industry. during the period, more than 100000 household photovoltaic power stations have been put into operation and connected to the grid, and more than 150,000 household photovoltaic power stations have been built and operated. It is conservatively estimated that in the nine years from 2022 to 2030, China's household photovoltaic will increase by more than 300GW, about seven times the current installed capacity.
It covers the rating of "prudent overweight" for the first time, with a target price of HK $3.50: the company has shifted its focus in the home appliance business to high-end TV products to open up the global market. The new energy business combines digitization with new energy to improve product efficiency and consolidate the leading position in the industry. We estimate that the company's net profit from 2022 to 2024 will be 39.0,48.4 and 6.15 billion yuan respectively, with year-on-year changes of + 98.5%, + 24.1% and + 27.1%, respectively. The target price corresponds to 2.1,1.7,1.4 times of PE from 2022 to 2024 respectively.
Risk tips: 1) intensified competition in the home appliance market; 2) photovoltaic business development is not up to expectations; 3) supply chain problems continue; 4) raw material price fluctuations; 5) business fluctuations.