The cost impact put pressure on profits in the first quarter, and the four-fee rate improved month-on-month. The company's 2022-Q1 revenue was 313 million yuan, +1.65% year on year, and net profit of the mother was 23 million yuan, -29.33% year on year. Achieved revenue of 1,303 billion yuan in 2021, +42.41% year on year, net profit of 104 million yuan, +3.77% year on year; 2022Q1's gross margin was 21.33%, -3.61/-0.26pct respectively; gross margin in 2021 was 21.66%, -4.77pct year on year; 2022Q1's net profit margin was 7.47%, -3.28/-1.41pct compared to the same period last year, and the net interest rate in 2021 was 7.97%, -2.97pct year on year; from the cost side, The 2022Q1 four-rate rate was 12.14%, and the four-month rate was +2.48/-1.03pct respectively. Among them, the sales/management/R&D/financial expenses ratio was 1.91/5.82/4.11/ 0.31%, respectively, +0.15/+1.69/+0.12/0.55pct, respectively, and +0.47/-0.48/-0.89/-0.13pct, respectively. The four rates improved month-on-month. Overall, the company benefits from high-quality customer resources and stable downstream demand, and its performance is relatively stable; short-term pressure on the profit side is mainly due to factors such as rising commodity costs, delays in price adjustment transmission of the company's products, and low price adjustment margins for some products. Following the implementation of subsequent price adjustments, combined with the increase in customer demand, the company's profitability is expected to continue to recover.
Growth in the NEV connector business is accelerating, and gross margin is under pressure in the short term. The increase in the company's performance benefited from high-quality customers (BYD, Lixun Precision, etc.) and the rapid release of consumer electronic connectors and new energy vehicle connectors. In 2021, the company's consumer electronics connectors achieved revenue of 870 million yuan, +38.57% year on year; NEV connectors achieved revenue of 317 million yuan, +147.86% year on year, and the lens business achieved revenue of 80 million yuan, -41.42% year on year; Q1 New Energy Connectors grew rapidly, achieving revenue of 111 million yuan, +73.55% year on year, +6.67% year on year, as a proportion of business It increased to 35.54% (24.32% in 2021); in terms of gross margin, the company's gross margin of consumer electronics connectors in 2021 was 22.55%, year-on-year - 0.56pct. The new energy connector business was relatively affected by the rise in raw materials, 17.44% compared to -3.96pct over the previous year.
New energy vehicle connectors open up incremental space, the domestic market of 30 billion by 2025. China has surpassed Europe and America to become the world's largest connector market (32% in 2017, with automotive accounting for 24%).
The new energy vehicle connector, on the other hand, is a new incremental market from 0-1. It is mounted as a safety device in a high-voltage structure (greater than 700V) to stably transmit power and signals between the power battery and various high-voltage components. Driven by dividends from the rapid development of new energy vehicles, it is estimated that the domestic market will reach 30 billion and the global market of 80 billion by 2025. Manufacturers such as Tyco, Yazaki, and Delphi account for a large share. Domestic manufacturers are expected to tear apart the originally closed supply system in the electrification trend. Currently, manufacturers, including companies, are gradually expanding into the electric vehicle sector, and localization is underway.
Risk warning: the boom in the automobile industry falls short of expectations; the impact of the epidemic exceeds expectations, etc. Venture capital suggestions: raise profit forecasts and maintain the “increase in holdings” rating.
Considering the acceleration in the NEV market, we slightly raised our profit forecast. We expect the EPS for 22/23/24 to be 1.23/1.53/1.92 yuan respectively (the previous forecast was 1.19 yuan for the year 22), and the corresponding PE was 13.9/11.1/8.9 times, respectively, maintaining the “increase in holdings” rating.