Incident: The company released its annual report for 2002 and the first quarter report for 2023. In 2022, the company achieved operating income of 5.011 billion yuan, YoY +11.61%; net profit of the mother was 240 million yuan, YoY +76.78%; gross profit margin was 17.48%, an increase of 0.36 pct over the previous year. The company's profit grew rapidly in 2022.
Comment: The 23Q1 performance is under pressure in the short term, and improving the efficiency of cost control contributed to rapid profit growth in 2022. Looking at a single quarter, 2022Q4 achieved operating income of 1,079 million yuan, YoY -24.07%; net profit of 10 million yuan, YoY -63.70%; gross profit margin of 19.23%, an increase of 4.48 pct over the previous quarter; 2023Q1 achieved revenue of 937 million yuan in a single quarter, YoY -10.42%; Guimo's net profit of 16 million yuan, YoY -65.30%; gross profit margin 19.03%, a year-on-year decrease of 1.44pct; 2023Q1 month-on-month on the revenue side and profit side of 202Q4 The decline has narrowed somewhat, and overall performance is under pressure in the short term. On the cost side, the company's cost control effect in 2022 was remarkable, with sales expenses of 107 million yuan, YoY +3.16%; management expenses of 1,189 million yuan, YoY +19.47%, mainly due to salary increases; R&D expenses of 196 million yuan, YoY -3.31%. Good control of expenses enabled the company to achieve rapid profit growth in 2022.
Leading manufacturer of high-speed communication connectors, technology leading customers and high quality. The company focuses on the development and production of connector products in the fields of data communication and consumer electronics, and also expands to connectors in other fields such as automobiles. It has rich experience in product development and mass production, and its comprehensive strength is at the forefront of the country.
Companies in the field of high-speed connectors have a certain first-mover advantage. 5G SFP and SFP+ series products have passed key customer performance tests. They are basic communication components in high-demand downstream fields such as 5G, data centers, optical fiber access, and cloud computing, and have broad development prospects. With years of accumulated mass production experience and industry-leading technology companies, they have maintained in-depth cooperation with many high-quality customers such as Huawei, ZTE, Foxconn, etc., and have gone deep into the downstream customer supply chain system, and their competitive position is relatively stable.
The solar bracket business is growing rapidly. In 2022, the company's solar bracket business achieved revenue of 2,913 billion yuan, YoY +29.14%. Companies in the field of solar tracking brackets have won a good international reputation. Their core customer, NeXTracker, ranked first in the field of photovoltaic tracking brackets. At the same time, they are expanding the domestic market through the Tianjin subsidiary, and are expected to continue to grow steadily with their leading edge in the solar bracket field.
Profit forecast: Yihua Co., Ltd. is an industry-leading manufacturer of high-speed communication connectors and solar brackets. It has an advantageous competitive position in the industry, and its performance is expected to grow steadily and rapidly. The company is expected to achieve operating income of 56.57/65.91/7.873 billion yuan in 2023-2025, and net profit of 393/503/635 million yuan, corresponding to EPS 2.30/2.95/3.72 yuan. It was covered for the first time and gave an “increase in holdings” rating.
Risk warning: Market competition intensifies, raw material prices rise, exchange rate fluctuations.