Dongguan Yutong Optical Technology Co.Ltd(300790) (300790)
National leader in security lens and leader in fixed focus field: the company is the optical lens enterprise with the largest shipment of surveillance camera lens in China. It has been deeply engaged in the field of optical lens for ten years. It has a full range of products such as high pixel, star light level and black light level, and occupies 33% of the market share of China’s security industry in 2018. Adhering to R & D and innovation, the company has mastered core technologies, has obtained 220 patent authorizations, and its products have passed a number of technical certifications; Bind the high-quality customer base, and the main customers include Hangzhou Hikvision Digital Technology Co.Ltd(002415) , Zhejiang Dahua Technology Co.Ltd(002236) , both digital, etc., ensuring the stability and growth of the company’s revenue. In the first three quarters of 2021, the company achieved a revenue of 1.574 billion yuan, a year-on-year increase of 72.91%; The net profit attributable to the parent company was 226 million yuan, a year-on-year increase of 190.16%.
With the advent of the pan security era, the consumer security market has great potential: with the development of 5g, artificial intelligence and other new generation information technologies, the functions of security products with single purpose are gradually diversified, and begin to integrate with telecommunications, transportation, construction and other fields. The pan security era is coming and the industry boundary is expanded. At the same time, with the continuous improvement of people’s safety awareness and the rapid rise of smart home industry, consumer security is developing rapidly. As a fixed focus leader, the company has obvious advantages. According to Frost & Sullivan data, it is expected that the shipment of security cameras in China will continue to grow from 2021 to 2025, which is expected to reach 830 million in 2025, and the compound growth rate will increase to 15.3% in the next five years.
The volume and price of the vehicle lens market have risen simultaneously, and the company actively plans to create a new growth point: the camera is an important part of automatic driving technology, and the vehicle camera market has grown rapidly in recent years. From the perspective of single vehicle assembly volume, the original vehicle only needs to be equipped with front view and rear view. However, with the improvement of the penetration of ADAS system and the application of face recognition and other technologies in the field of automotive electronics, the in vehicle and look around cameras will be further applied. In terms of value, the threshold of vehicle specification electronic components is high, which brings technical barriers and sales premium, and will bring long-term premium to chip manufacturers. The value of cameras will increase with the upgrading of ADAS. According to Frost & Sullivan’s calculation, from 2016 to 2020, the market scale of China’s car camera increased from 2.1 billion yuan to 5.78 billion yuan, with an average annual compound growth rate of 28.8%; It is estimated that from 2021 to 2025, the market scale of China’s car camera will increase from 7.63 billion yuan to 23.16 billion yuan, with an average annual compound growth rate of 32.0%. The company established a wholly-owned subsidiary of automotive vision on August 18, 2021, and actively layout the vehicle market by virtue of its advantages in R & D, manufacturing, channel, core parts and components.
Profit forecast, valuation and rating: the company is a leading optical lens manufacturer in China and has a high market position in the field of security; The company continues to improve the product layout and explore new growth points in the field of vehicle lens. In the future, the company’s optical lens business is expected to deeply benefit from the continued prosperity of the consumer security market and is optimistic about the company’s market development and product volume in the field of vehicle lens in the future. We predict that the company’s net profit attributable to the parent company from 2021 to 2023 will be 310 million yuan, 410 million yuan and 510 million yuan, corresponding to 32x, 25X and 20x PE in 21-23 years respectively. Considering the rapid growth of the company’s traditional business in 2021, the scale effect greatly improves the company’s profitability, and the company’s vehicle business is expected to contribute new growth points, we are optimistic about the company’s future development and give a “overweight” rating for the first time.
Risk tip: the risk of intensified competition, high customer concentration and digestion of new capacity in the future.
