Yingqu Technology (002925): short-term performance pressure waiting for electronic cigarette business volume
Event: The company releases the 2023 annual report and the 2024 first quarter report
The company released the annual report in 2023 and the report in the first quarter of 2024. In 2023/2023Q4/2024Q1, the operating revenue was 3.860/900/764 billion yuan, -11.16%/-7.79%/-12.30% year-on-year; The net profit attributable to the parent company was RMB 451/117/56 million, - 35.02%/- 25.51%/- 30.63% year on year; The net profit not attributable to the parent company was RMB 387/103/43 million, - 37.31%/-9.72%/+2.19% year on year.
The innovative consumer electronics business has declined, and the development of automotive electronics business will shine in 2023. By product, the company's revenue from intelligent control parts/innovative consumer electronics products/automotive electronics products/health environment products/technology R&D services will be 13.31/11.55/5.14/3.78/1.13, respectively,+30.50%/-48.37%/+42.37%/+36.77%/+18.11%, The decline in the revenue of innovative consumer electronics products was mainly affected by the fluctuation of order demand of some customers. The gross profit margin of intelligent control product parts/innovative consumer electronics/automotive electronics was 23.73%/34.88%/28.05%, respectively, -4.00/+3.67/-1.18 pcts year-on-year.
The optimization of product structure and the fluctuation of exchange rate led to the decline of gross profit margin. The company always paid attention to R&D investment. In 2023/2023Q4/2024Q1, the gross profit margin of the company was 30.70%/33.46%/27.58%,+0.26/1.24/2.30pcts year-on-year. The change of exchange rate and product structure led to the decline of the gross profit margin of the company; The net interest rate attributable to the parent company was 11.67%/13.00%/7.28% respectively, -4.29/-3.09/1.92pcts year-on-year. In 2023/2023Q4/2024Q1, the company's sales expense rate was 2.27%/3.27%/2.19%,+0.31/+0.13/+0.09 pcts year-on-year; The management expense rate was 4.72%/-0.73%/7.65%,+0.20/-1.80/+0.44pcts year on year; The R&D expense rate was 9.37%/10.62%/10.34% respectively,+0.80/+0.98/+0.65pcts year-on-year; The financial expense rate was -0.64%/-0.17%/-0.90%,+2.28/-2.88/-3.10 pcts year-on-year. Although the company's performance is under pressure in the short term, it still insists on guaranteeing R&D investment. Since its listing, the company has continued to increase R&D investment in new technologies, new products and new processes to accumulate and precipitate key technologies.
Investment advice
We are optimistic that the company will actively cooperate with key customers to develop large products based on UDM mode. The heating module and complete machine projects of electronic cigarette business are expected to be scaled up, and the business of household engraving machine is expected to be better. We will actively expand new product lines and incubate new products. We expect the company's revenue from 2024 to 2026 to be RMB 4548/5689/6.909 billion respectively, with year-on-year growth of 17.8%/25.1%/21.5%; Net profit attributable to the parent company was 522/704/911 million yuan, up 15.9%/34.8%/29.4% year on year. As of April 26, 2024, the total share capital and closing market value correspond to EPS of 0.67/0.90/1.17 yuan and PE of 22.10/16.40/12.67 times respectively. Maintain the "buy" rating.
Risk warning
Market and policy risks of export products, risks of relative concentration of customers, risks of decline in gross profit rate of products, risks of fluctuations in raw material prices, and risks of exchange rate fluctuations.
