The company released its 2022 report: achieved revenue of 2,529 million yuan, a year-on-year decrease of 27.75%; achieved net profit of 502 million yuan, a year-on-year decrease of 54.82% (the forecast decline range of performance is 50.00%-60.00%); net profit of Fumo after deduction was 448 million yuan, a decrease of 57.76% over the previous year. The basic earnings per share were 0.15 yuan/share, down 68.05% from the previous year; the weighted average return on net assets was 6.94%, down 10.52 pct from the previous year.
In 2022, the company's infrared thermal imager achieved revenue of 2,225 million yuan, a year-on-year decrease of 14.92%, accounting for 87.99% of total revenue, an increase of 13.27 pct over the previous year; the gross profit margin was 51.27%, a year-on-year decrease of 13.63 pct; traditional ammunition and information-based ammunition achieved revenue of 264 million yuan, a year-on-year decrease of 67.18%; accounting for 10.42% of total revenue, a year-on-year decrease of 12.52 pct; gross profit margin of 18.65%, a year-on-year decrease of 8.09pct.
R&D investment continues to grow, and R&D personnel have increased dramatically: in 2022, the company's overall gross margin was 46.71%, down 9.22pct from the previous year; the net interest rate to the mother was 19.85%, down 11.89pct from the previous year. The company's total expenses for the period were 655 million yuan, a decrease of 1.78% over the previous year; period expenses accounted for 25.90% of revenue, an increase of 6.85 pct over the previous year. R&D expenses were 413 million yuan, an increase of 11.34% over the previous year; they accounted for 16.33% of operating income, an increase of 5.73 pct over the previous year. The total number of employees in the company was 4,225, an increase of 10.31% over the previous year; there were 1,532 R&D personnel, a sharp increase of 51.98% over the previous year, accounting for 36.26% of the total number of employees, an increase of 9.94 pct over the previous year.
The revenue and performance of subsidiaries Handan Electromechanical and Gaoxin Technology declined year on year, and Zhisan Technology's revenue and performance both increased: in 2022, Handan Electromechanical achieved revenue of 267 million yuan, down 67.13% from the previous year; net profit of 0.2 million yuan, down 98.74% from the previous year; and the net interest rate was 0.60%, down 15.04 pct from the previous year. Gaoxin Technology achieved revenue of 823 million yuan, a year-on-year decrease of 23.17%; net profit of 328 million yuan, a decrease of 49.60%; and a net interest rate of 39.90%, a year-on-year decrease of 20.93 pct.
Smart Sense Technology achieved revenue of 607 million yuan, up 5.09% year on year; net profit of 135 million yuan, up 6.99% year on year; net interest rate of 22.28%, up 0.40pct year on year.
Continued promotion of batch supply: According to the company's announcement on December 23, 2022, the company and its wholly-owned subsidiary Handan Electromechanical signed multiple project contracts with customers. The contract amount was 116 million yuan, accounting for 3.32% of the company's total operating revenue in 2021. Among them, the parent company delivered a certain type of infrared thermal camera product for a certain project to customer one, with a contract amount of 61,6633 million yuan; Handan Electromechanical delivered a series of anti-riot and groundbreaking products to customer two, with a contract amount of 54.36 million yuan. The total amount of the company's important contracts in 2022 was 385 million yuan, accounting for 15.22% of the company's total revenue in 2022.
We adjusted our profit forecast based on the latest financial reports. The company's net profit for 2023-2025 is estimated to be 720/905/1,113 billion yuan respectively, and EPS is 0.17/0.21/0.26 yuan/share respectively. Corresponding to the closing price of PE on April 21 was 66.9/53.2/43.3 times, maintaining the “increase in holdings” rating.
Risk warning: Product delivery progress falls short of expectations, new product development falls short of expectations, and industry competition intensifies.