Events. On August 14, the company released its 2023 half-yearly report. In the first half of 2023, the company achieved operating income of 1.516 billion yuan, an increase of 104.20% over the same period last year; the net profit attributed to the shareholders of the parent company was 81.4571 million yuan, YoY-6.07%. In 2023, Q2 achieved an operating income of 858 million yuan in the single quarter, an increase of 124.67 percent over the same period last year, and a net profit of 51.6058 million yuan, an increase of 72.88 percent over the previous quarter.
Continue to optimize the product layout, revenue to achieve steady growth. In the first half of 2023, the company achieved operating income of 1.516 billion yuan, an increase of 104.20% over the same period last year, mainly due to the inclusion of Sino-German cable in the consolidated statement. The company realized a net profit of 81.4571 million yuan and YoY-6.07%. During the reporting period, due to the resonance influence of comprehensive factors such as cash mergers and acquisitions, the use of new factories, overseas investment, and R & D investment, various expenses in superimposed production and operation increased compared with the same period last year, resulting in a year-on-year decline in profits. Of this total, Q2 achieved an operating income of 858 million yuan in the single quarter of 2023, an increase of 124.67 percent over the same period last year, and a net profit of 51.6058 million yuan, an increase of 72.88 percent over the previous quarter. During the reporting period, the gross profit margin of consumer electronics wire rod for the company's main products was relatively high, which was affected by the downturn in the terminal market, resulting in a marked drop in demand and a decrease in operating income. At the same time, the copper price of raw materials decreased compared with the same period last year, resulting in a decrease in revenue of the parent company and a slight decline in the comprehensive gross profit margin of the company. In the first half of 2023, the company's sales gross profit margin reached 16.4%, down 5.3 pct; year-on-year net sales margin of 5.37%, down 6.31 pct from the same period last year.
Continue to increase investment in research and development, fund-raising projects to accelerate the landing to promote the release of production capacity. In the first half of 2023, the company incurred R & D expenses of 56.9973 million yuan, an increase of 132.89% over the same period last year; the company continued to increase R & D investment, attached importance to technology reserves, and made a forward-looking layout in the field of automotive and industrial control. In the automotive field, the company has completed the development of HSD star twisted pair high-speed data cable and automotive LVDS high-speed and low-voltage differential signal data cable; at the same time, it has developed liquid-cooled charging pile line and new reserve automobile low-voltage wire series ultra-high speed production technology. In the field of industrial control, the company will locate customers' demand for precise control of robots and develop industrial servo control system motor lines together with Kobao Optoelectronics. At the same time, during the reporting period, the company has completed the fund-raising project "Annual production capacity of 3.85 million km Intelligent Fine CNC Wire expansion Project", and started a new plant to be put into use.
The company will add new special production equipment for new energy product line and automobile product line and precision production equipment imported from Germany to promote the capacity of the new plant to enter the climbing period.
Mergers and acquisitions integrate resources and horizontally extend the industrial chain. The company acquired 100% stake in Sino-German Cable and 30% stake in Kobao Optoelectronics. Sino-German cable has become an excellent supplier to Huawei Technology, ZTE Corporation and other large domestic communication equipment manufacturers, while Cobao Optoelectronics has become an industrial control automation cable supplier for Panasonic, KUKA, YASKAWA and other robot manufacturers, as well as a long-term partner of medical device manufacturers such as Siemens, Lianying and Pu'ai Medical. New Asia Electronics gives full play to the M & A channel role of the capital market, effectively realizes the horizontal extension of the industrial chain, enriches the product categories, and actively expands the market development space.
Profit forecast and investment rating: we predict that the return net profit of the company from 2023 to 2025 will be RMB 181max. 258 million RMB, corresponding to 2023-2025 EPS will be RMB 0.69pm, respectively. The current stock price corresponding to PE will be times higher than that of 22-19-16. Based on the fact that the company is actively engaged in product technology upgrading and innovation and the improvement of revenue performance brought about by superimposed capital acquisitions, we are optimistic about the future development of New Asia Electronics, covering it for the first time and giving it a "buy" rating.
Risk hints: market competition risk, raw material price fluctuation, macroeconomic fluctuation risk, quality control risk.