\u3000\u3 China Vanke Co.Ltd(000002) 475 Luxshare Precision Industry Co.Ltd(002475) )
2022q1 performance exceeded expectations Luxshare Precision Industry Co.Ltd(002475) announced that in 2021, the total operating revenue was about 154106 billion yuan, an increase of 66.60% over the same period of last year; It is expected that the upstream investment in armor and ODS will decrease by about 7.2 billion yuan in the same period of last year, but the overall net profit of armor and ODS will decrease by about 7.2 billion yuan in the same period of last year. The company expects to realize a net profit attributable to the parent company of RMB 1.69 ~ 1.75 billion in 2022q1, with a year-on-year increase of 25% – 30%. The company fully grasps the market opportunities, improves its profitability and expands its product layout in smart wearable, precision structure modules, system packaging, mobile phones, optical display modules and other products, promotes a virtuous circle of business and continuously carries out vertical integration.
Wearable heat does not decrease and works closely with key customers. Wearable business share is expected to continue to improve, mobile phone assembly layout and customers continue to promote, and it is still good in the long term. With the increase of watch assembly and sip and other new products, it is expected that the share of major customers will continue to increase this year, and the company’s consumer electronics business is expected to continue to grow. The mobile phone assembly and structural parts business is progressing smoothly and is expected to contribute significant net profit increment this year. The company always focuses on precision manufacturing and provides customers with complete comprehensive solutions. The forward-looking layout and intensive work over the years have realized the sustained and rapid growth of the company’s performance. The company insists on comprehensive cooperation with key customers and will pay high attention to and participate in other important product lines of key customers.
The long-term business of communication and automobile has made repeated breakthroughs, giving birth to emerging growth momentum. The company is committed to reproducing the strong capabilities and successful experience accumulated in the field of consumer electronics to other business sectors to form a virtuous circle of mutual promotion. Over the years, the company’s products laid out in advance in the communication, data center, industrial and automotive electronics markets have also become a new driving force for the company’s development and performance. In the field of communication and data center, the company deeply covers products including high-speed interconnection, optical module, heat dissipation module, base station antenna, base station filter and so on.
Reach strategic cooperation and enter automobile tierone manufacturers. Establish a joint venture with Chery new energy to enter tierone. On February 11, 2022, Luxshare Precision Industry Co.Ltd(002475) and Chery new energy planned to form a joint venture to purchase 19.88% equity of Chery holdings, 7.87% equity of Chery shares and 6.24% equity of Chery new energy held by Qingdao Wudaokou for RMB 10.054 billion, specializing in the research, development and manufacturing of new energy vehicles, and providing cutting-edge R & D, design, mass production platform and access to the sea for Luxshare Precision Industry Co.Ltd(002475) automobile core parts business, Committed to achieving the company’s medium and long-term goal of becoming a leading manufacturer of automotive parts Tier1. In the automotive field, the company focuses on the layout of the blood vessels and nervous system of the whole vehicle. With the continuous volume of new energy vehicles and the gradual introduction of customers outside China, it is expected to become a new growth power.
When the dust settles, the new design does not constitute patent infringement. The US 337 investigation preliminarily confirmed that the company’s products did not constitute patent infringement. The company issued an announcement on March 14, which showed that the alleged patent infringement of the company’s conductive plastic technology and terminal horizontal injection molding technology by Amphenol group in December 2020 was preliminarily ruled by ITC in March 2022, which did not constitute an infringement of the rights of Amphenol group. At the same time, the company’s new design and related products have successively passed the customer verification procedure.
Profit forecast and valuation suggestions: the company continues to expand its product line and improve its market share in the field of consumer electronics. Communication, data center, industrial and automotive electronics have also become a new driving force for the company’s development and performance. We expect that in 2021e / 2022e / 2023e, the revenue will be 154107/195716/254431 billion yuan, with a year-on-year increase of 66.6% / 27.0% / 30.0%, and the net profit attributable to the parent company will be 70.72/100.11/13.682 billion yuan, with a year-on-year increase of – 2.1% / 41.6% / 36.7%. At present, the PE corresponding to the stock price is 34.1/24.1 / / 17.6x, maintaining the “buy” rating.
Risk warning: the economic situation changes and the downstream demand is less than expected.
