The company's 23Q2 performance improved significantly month-on-month, consumer electronics business stabilized and rebounded, passenger car business performance is bright, the second half of the year is expected to grow at a high speed. We maintain the company's 2023-2025 net profit forecast of 1.16,1.84 and 280 million yuan, corresponding to the 2023-2025 EPS is 1.04,1.65,2.50 yuan respectively. Give the company 74 times PE in 2023, adjust the target price to 77 yuan (originally 108 yuan), and maintain the "buy"
Rating.
23Q2 performance improved and net interest rate rebounded. The company realized revenue and return net profit of 2.46 and 27 million yuan in the first half of 2023, 1.52 and 24 million yuan in revenue and return net profit of-31% and-31% respectively compared with the same period last year. The company's 23Q2 performance improved significantly, consumer electronics business stabilized, passenger car business performed brilliantly, gross profit margin and net profit margin were 51.3% and 15.6%, month-on-month increase of 6.1%, 13.7pcts, all significantly recovered.
Consumer electronics business is picking up and is expected to continue to grow in the second half of the year. According to the company's semi-annual report, 23Q2's product shipments in the main core strategic customers continued to increase, and the company's consumer electronics business achieved revenue of 125 million yuan, + 10% year-on-year and + 67% month-on-month. According to the forecast of the electronics group of CITIC Research Department, the demand for smartphones in 2023 is expected to be "low before and then high". In the second half of the year, traditional promotions and holidays, new phones and new chips will help demand pick up, and the performance of the company's consumer electronics sector is expected to continue to improve.
The passenger car business maintains high growth and has a broad space for growth. The company's passenger car business income maintained a high growth rate. 23Q2 achieved operating income of 23 million yuan, + 35% compared with the same period last year, and revenue in June exceeded the order of magnitude of 10 million compared with the previous month, a record high in a single month. With the gradual mass production of end-customer models, the company's passenger car business is expected to maintain high growth. The new production capacity of the company is invested in the original and post-market products of automobiles, and the formulations of water-based colorants and varnishes for repair coatings continue to break through. we believe that the company will gradually break through the original factory and post-market areas, and the revenue volume is expected to rise to a higher level.
Power battery insulation coating scheme leads the industry change. The company's insulation coating materials are supplied in small quantities in important strategic customers, and the first batch of digital intelligent coating equipment is delivered smoothly and has passed phased acceptance.
The company's scheme is used to replace traditional materials and equipment such as core blue film, blue film coating machine, and has a broad market space. At present, the company's R & D sample process is in the forefront of the industry, and is expected to lead the industry change.
Risk factors: consumer electronics business recovery is not as expected; downstream passenger car customer sales are not as expected; new business volume and new customer expansion are not as expected; the company's new capacity construction progress is not as expected; the company's new capacity digestion is not as expected.
Earnings forecast, valuation and rating: we maintain the company's homing net profit forecast of 1.16,1.84 and 280 million yuan in 2023-2025, corresponding to 1.04,1.65,2.50 yuan EPS in 2023-2025, respectively, and the current stock price corresponds to 52,33,22 times PE. With reference to the company's historical PE-TTM valuation level (the company's 10-20-40 valuation quartile is 74-78-84 times PE respectively), the company is given 74 times PE in 2023, and the company's target price is adjusted to 77 yuan (originally 108 yuan) to maintain the "buy" rating, taking into account the equity changes caused by the increase of the company.