Avary Holding(SZ:002938) Shanxi Securities·2024-04-01 16:00Investment Rating - The report assigns an "Accumulate-A" rating to the company, indicating a positive outlook for the stock [5][30]. Core Views - The company has faced short-term pressure on its performance due to the cyclical nature of the consumer electronics industry, but it is strategically expanding into the automotive and server product lines, which are expected to drive future growth [2][15]. - In 2023, the company reported a revenue of 32.066 billion yuan, a year-on-year decrease of 11.45%, and a net profit of 3.287 billion yuan, down 34.41% year-on-year [2][15]. - The company is focusing on enhancing product quality and increasing market share in the communications sector while also making significant investments in research and development [3][19]. Summary by Sections Company Overview - The company is a leading manufacturer of printed circuit boards (PCBs), providing a comprehensive range of products and services to industry-leading clients [9][19]. - It has a diverse product line that includes communication boards, consumer electronics, automotive, and server boards [11][19]. Financial Performance - The company achieved a revenue of 320.66 billion yuan in 2023, with a notable decline in the consumer electronics segment, which saw a 39.59% drop in revenue to 79.75 billion yuan [2][3]. - The communications board segment, however, grew by 3.70% to 235.13 billion yuan, demonstrating resilience in a challenging market [3][19]. - The company’s gross margin for 2023 was 21.34%, down from previous years, reflecting the impact of weak downstream demand [23][24]. Strategic Initiatives - The company is actively expanding into emerging sectors such as AI and electric vehicles, with significant investments in R&D, amounting to 1.957 billion yuan in 2023, which is 6.10% of its revenue [3][24]. - It has successfully launched products in the automotive sector, including radar processing boards and high-frequency antenna boards, with a revenue increase of 71.45% in this segment [3][19]. Future Outlook - The company is projected to see a gradual recovery in net profit, with estimates of 3.704 billion yuan in 2024, representing a year-on-year growth of 12.7% [4][6]. - The expected earnings per share (EPS) for the next three years are 1.60 yuan, 1.90 yuan, and 2.20 yuan, with corresponding price-to-earnings (P/E) ratios of 14.5, 12.2, and 10.6 [4][5]. Market Position - The company maintains a strong market position, with over 80% of its revenue coming from international markets, indicating a successful global expansion strategy [19][21]. - It has established partnerships with key players in the server industry and is recognized for its technological advancements, including receiving the AMD "Partner Excellence Award" [3][19].