\u3000\u3 Guocheng Mining Co.Ltd(000688) 127 Zhejiang Lante Optics Co.Ltd(688127) )
1q22’s performance was slightly lower than expected due to the concentrated clearing of key customers. On April 21, the company released 1q22 results: the revenue of 90 million (- 7% YoY) and the net profit attributable to the parent company of 22 million (- 44% YoY) were slightly lower than expected, mainly because the negative factors of the long prism project, a major customer in North America, were mainly cleared in this quarter. The revenue of key customers in this quarter was only 2.84 million, compared with 30 million in the same period last year. Accordingly, the gross profit margin of 1q22 decreased by 15.6ppt year-on-year and 7.9ppt month on month.
The gross profit margin of glass aspheric surface has increased significantly and entered a period of explosive growth. The gross profit margin of the company’s glass aspheric surface in 21 years has rebounded to 40% (compared with 19% in 20 years). In addition, 1q22 company’s glass aspheric surface achieved an income of 30 million yuan, + 71% yoy. The company’s glass aspherical lens production capacity is scarce. Maxell’s order transfer and the orders of lidar brand manufacturers continue to verify that “the company is expected to continue to benefit from the outsourcing demand of vehicle lens and lidar glass aspherical lens”. According to our calculation, the company’s revenue from glass aspheric surface is expected to double in 22 years (the proportion of total revenue from vehicle lens and vehicle lidar increased from 30% in 21 years to 40-50% in 22 years), and the company will continue to maintain high-speed growth in 23 years. In addition, the revenue of traditional imaging prism 1q22 is 39 million, + 38% YoY, which is expected to continue to maintain rapid growth throughout the year.
The prospective design feedback of the supply chain is positive, the target price is 28 yuan / share, and the rating of “better than the market” is maintained. Our supply chain research shows that major customers in North America have a strong willingness to promote prospective design in 23 years. As the main supplier of long prism, the performance flexibility of the company is expected to be fully reflected. In view of the negative impact of key customers on 1q22, we adjusted the profit forecast accordingly. It is estimated that the net profit attributable to the parent company in 22 / 23 will be 153 / 225 million yuan respectively (excluding the influence of key customers in North America, the change range is – 9% / – 6% respectively). At present, the company’s negative factors are basically implemented. Driven by the vehicle mounted optical industry, the glass aspheric surface will also usher in medium and high-speed growth. At the same time, the company’s traditional prism is also benefiting from the rapid expansion of downstream customers. The rapid increase in the proportion of the company’s glass aspheric surface business will continue to have a positive effect on the improvement of the company’s valuation. However, considering the uncertainty of the macro environment, We still revised down the company’s PE (23 years) valuation to 50 times (originally 60 times PE in 2023). To sum up, the target price of the company is 28 yuan / share (revised down 22%), maintaining the rating of “better than the big market”.
Risk tips: 1) the risk that the outsourcing order of glass aspheric customers is less than expected; 2) The risk of postponement or cancellation of Apple’s periscope design.
