\u3000\u3 China Vanke Co.Ltd(000002) 036 Lianchuang Electronic Technology Co.Ltd(002036) )
Event: the company released the 21st Annual Report.
The performance of the annual report was lower than expected, and the investment in vehicle R & D increased significantly: in 2021, the company's revenue was 10.6 billion yuan, yoy + 40%, the net profit attributable to the parent was 112 million yuan, yoy-31%, and the R & D expense was 387 million yuan, yoy + 57%. The high growth of the company's revenue is mainly due to the rapid growth of touch display business, and the decline of parent company profit is mainly due to the increase of R & D investment and the decline of gross profit margin due to the intensification of competition in mobile phone business. The substantial increase in R & D expenses of the company is mainly due to the increase in investment in vehicle lens and module.
The on-board business and HD wide-angle business continued to grow rapidly: in 2021, the revenue of on-board lens and module increased rapidly, with a year-on-year increase of 615%, and the profitability was enhanced, with a good development momentum. The revenue of high-definition wide-angle lens and module also showed rapid growth, with a year-on-year increase of 82%. The two together drove the overall optical business revenue to increase by 71% to 2.67 billion yuan. The company has carried out strategic cooperation with mobile eye, NVIDIA, Aurora, Huawei and other intelligent driving solution platforms, and continued to develop advanced auxiliary safe driving and intelligent cockpit lens. The self driving vehicle lens series developed in cooperation with Valeo, Magna, APTIV, mcnex and other international well-known automotive electronics manufacturers are in large quantities. The company has obtained the fixed-point of four new projects in Tesla, two of which have entered mass production, and the other two have passed the customer certification. It is expected to gradually increase the volume in 2022. A number of high-end 8madas on-board image modules and DMS image modules developed by the company in cooperation with Weilai and BYD have been designated and mass production preparations have been completed. With the implementation of the raised investment project, the follow-up capacity guarantee is expected to drive the continuous release of on-board business. HD wide-angle business company keeps good shipments to GoPro, Dajiang and other customers.
The mobile phone business grew rapidly, but its profitability was insufficient: in 2021, the company's mobile phone lens and image module revenue increased by 59% year-on-year. While maintaining cooperation with Huaqin, Wentai, Longqi and other important mobile phone ODM customers, the company has strengthened its service to ZTE, Lenovo, Samsung and other brand mobile phone customers. At the same time, due to the intensified competition in the mobile phone market and the rise in the price of raw materials, the overall gross profit margin of the company's optical business decreased by 4.2pct.
We predict that the company's earnings per share in 22-24 years will be 0.35 yuan, 0.52 yuan and 0.69 yuan respectively (the original forecast for 22-23 years is 0.42 yuan and 0.62 yuan respectively, mainly reducing the revenue forecast). According to the 22-year 38 times PE valuation of the comparable company, the corresponding target price is 13.34 yuan, maintaining the buy rating.
Risk tips
The penetration rate of automatic driving is lower than expected, the shipment of optical lens is lower than expected, and the risk of gross profit margin decline.
