\u3000\u3 Guocheng Mining Co.Ltd(000688) 686 Opt Machine Vision Tech Co.Ltd(688686) )
Event: Recently Opt Machine Vision Tech Co.Ltd(688686) released the annual report of 2021. In 2021, the company achieved an operating revenue of 875 million yuan, a year-on-year increase of 36.21%; The net profit attributable to the parent company was 303 million yuan, a year-on-year increase of 24.04%; Net profit deducted from non parent company was 262 million yuan, with a year-on-year increase of 13.19%.
The lithium battery sector has a high boom and the overall plan has a high growth
The company achieved a revenue of 875 million yuan in 2021, with a year-on-year increase of 36.21%, in line with previous market expectations. From the perspective of downstream sectors, 3C sector benefited from the expansion of the scope of cooperation between the company and end major customers and maintained steady growth. The revenue in 2021 was 518 million yuan, a year-on-year increase of 4.4%. The revenue share of lithium battery sector has increased significantly. The revenue in 2021 was 258 million yuan, with a year-on-year increase of 241.7%, mainly due to: 1) the rapid development of new energy industry and the continuous large capacity of lithium battery terminals in China; 2) The penetration rate of machine vision application in new energy industry is increasing; 3) With the application and promotion of a large number of mature schemes, the company’s customer base has included Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , honeycomb, etc. At the same time, the company has also made a large increase in the semiconductor and new energy vehicle sectors, and the total revenue of relevant sectors is about 100 million yuan. From the perspective of product line, the revenue of the company’s camera products in 2021 was 144 million yuan, an increase of 185% over 2019; The revenue of vision system was 92 million yuan, an increase of 110% over 2019; The revenue of accessories was 128 million yuan, a year-on-year increase of 124%. We believe that the substantial growth of products other than light sources reflects the expansion of the solutions provided by the company from imaging solutions to overall solutions. Considering that the application of machine vision in the lithium battery industry is still in its infancy, the improvement of the overall scheme ability is conducive to the company’s increase in market share and support performance growth.
Changes in income structure and high investment in R & D put short-term pressure on profitability
In 2021, the company realized a net profit attributable to the parent company of 303 million yuan, with a year-on-year increase of 24.04%; The net profit deducted from non parent company was 262 million yuan, with a year-on-year increase of 13.19%, and the profit growth rate was lower than the income growth rate. On the one hand, the company’s overall gross profit margin in 2021 was 66.5%, down 7.43pct from the same period last year, mainly due to the rapid increase in the proportion of revenue in the lithium battery sector. However, the lithium battery industry is still in the early stage of promotion, with a high degree of customization and relatively fierce competition, so the gross profit margin is lower than that in the 3C sector. On the other hand, the R & D / sales expense rates of the company in 2021 were 15.67% / 16.31% respectively, an increase of 3.77/2.45 PCT over the same period last year, mainly because the company is actively expanding new downstream markets. Looking forward to 2022, we believe that the company’s profitability is expected to stabilize and recover. 1) From 2021q4, the gross profit margin of the company has rebounded, with a month on month increase of 1.15pct. It is expected that this trend is expected to continue in 2022 with the large-scale replication of the company’s solutions in the lithium battery sector. 2) The company has made pre investment in 2021, especially the expansion of personnel. It is expected that with the maturity of the product scheme, it is expected to slow down this year, superimposing the scale effect, which is expected to drive the release of profits.
China’s machine vision industry is in the ascendant, and the company’s subsequent growth momentum is abundant
We believe that machine vision is a track with long slope and thick snow. It is expected to maintain a high prosperity under the general trend of accelerated intelligent manufacturing. In the short term, the capital expenditure of 3C sector in 2022 is expected to pick up compared with last year, driving the corresponding increase in machine vision investment. The product line cooperating with the company is expanded from mobile phones to tablets, headphones, watches, etc. it is expected that 3C will still be the basic performance of the company. In the medium term, the expansion of lithium battery capacity will bring deterministic growth to the machine vision industry. With the expansion plans of Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , honeycomb and other manufacturers, the industry space may further grow, and the company, as the leader, is expected to continue to benefit. In the long run, under the general trend of industrial upgrading and accelerated intelligent manufacturing, many industries, including automobile, semiconductor and medicine, also have a great demand for machine vision, and the company is expected to take advantage of the localization of downstream equipment and realize the horizontal expansion among industries with the full product line and scheme delivery ability.
Investment suggestion: Opt Machine Vision Tech Co.Ltd(688686) as the leader of China’s industrial vision, it is expected to benefit from the acceleration trend of China’s intelligent manufacturing for a long time. While expanding the application of downstream industries, it will increase the value of single customer through product line expansion, and the subsequent growth momentum will be abundant. We expect that the company’s revenue from 2022 to 2024 will be 1.179/15.28/1.999 billion yuan respectively, and the net profit attributable to the parent company will be 3.77/5.25/721 billion yuan respectively. It will be covered for the first time and given a Buy-A investment rating. Give a six-month target price of 228 yuan, equivalent to 50 times the dynamic P / E ratio in 2022.
Risk tips: 1) the risk that the development progress of downstream application fields is less than expected; 2) The risk of excessive concentration of downstream major customers; 3) The risk that the R & D and sales of self-developed hardware products are less than expected; 4) The risk that the R & D and sales of visual software products are less than expected.
