revenue and net profit are declining. Is such a listed company worthy of investors' attention? In most cases, such companies can indeed be removed from the stock selection list. However, if the company's market competitive advantage is not lost, it is more affected by the external environment and wait for the opportunity, this may be your opportunity.
In the past, it was not easy for us to find companies whose revenue and net profit declined but we could still pay attention to. But in the special environment in recent years, more and more " specialized and new " companies actually meet this feature. Dazu Laser , which has been deeply involved in the laser field for many years, has been greatly affected by external factors this year, but if you study this company carefully, you will find that this is still a company worth paying attention to.
2022 Q3 financial report: Due to insufficient demand for downstream customers, Dazu Laser's performance is under pressure
On October 24, Dazu Laser released its third quarter financial report for 2022. According to financial report data, Dazu Laser's company's operating income in the third quarter was 3.625 billion yuan, a year-on-year decrease of 18.43%; net profit attributable to shareholders was 382 million yuan, a year-on-year decrease of 37.58%.
In the first three quarters of 2022, Dazu Laser Company's operating income was 10.562 billion yuan, a year-on-year decrease of 11.47%; net profit attributable to shareholders was 1.014 billion yuan, a year-on-year decrease of 32.45%.
Dazu Laser stated in the announcement that the company's operating profit, total profit, income tax expenses, net profit, and net profit attributable to the parent company's net profit fluctuated significantly compared with the same period last year because of the epidemic, the company's downstream customer demand and reduced orders.
Why is Dajia laser so greatly affected by the external environment?
Dajia Laser is the largest laser processing equipment manufacturer in Asia and a world-leading overall laser processing and automation solution service provider. It currently mainly provides power battery special equipment, photovoltaic equipment, PCB equipment, consumer electronic equipment, and semiconductor wafer processing equipment for the market.
In life, we may be more likely to hear words such as laser lettering , laser beauty, laser cutting , so we mistakenly think that the main value of laser can only be in the fields of cutting and medical beauty . In fact, as the industry becomes more and more mature, laser technology can be combined with major industries, which is a very critical technology in the processing and manufacturing industry.
laser can not only be used for medical beauty, but also be used in high-end precision manufacturing such as printing high-density electronic circuits, circuit board marking and cutting, soft-pack battery module welding, and battery cell product welding. With marking, cutting and welding as the core values, industrial laser equipment helps manufacturing enterprises improve processing efficiency and improve product processing density in digital and intelligent ways, ultimately providing safer and more precise products to OEM manufacturers and brands.
As an end consumer, whether you buy NIO , new energy vehicle , or mobile phones like Apple , these products use laser technology during the processing process, and even many devices use Dazu laser.
According to the previously disclosed information, CATL , China Innovation Aviation (formerly AVIC Lithium Battery ), YI Lithium Energy , and Honeycomb Energy are all Dazu laser customers. Dazu Laser provides services to new energy consumer terminals by providing power battery solutions to these customers. In the new energy sector , Dazu Laser provides equipment to many domestic new energy vehicle manufacturers such as NIO, Leapmotor, Geely , Great Wall, etc., and even delivers the first integrated thermoformed door ring automatic production line in China to Heistamp, a core body parts supporting company for Tesla .
Therefore, judging from the industrial chain of Dazu Laser, Dazu Laser takes laser technology as the core and serves manufacturing companies. Once consumption in the external market is weak and the number of products purchased by end consumers does not grow rapidly, customers' demand for Dazu Laser will decrease. As the entire consumer electronics market suffers relatively great challenges in 2022, this has led to a significant decline in the performance of Dazu Laser's consumer electronics business. But with Apple's new phone release, the decline in Dazu Laser's consumer electronics business may be alleviated.
2022 third quarter financial report, Dazu Laser did not disclose the revenue status of various businesses, but according to the financial report data of Dazu Laser's previous semi-annual report, most of the company's product revenue in the first half of the year was declining. Among them, the revenue of consumer electronics business was 986 million yuan, a decrease of 43% from 1.733 billion yuan last year; the revenue of semiconductor panel business was 717 million yuan, a decrease of 13.6% from 830 million yuan last year. The result of
shows that Dazu Laser's performance is greatly affected by the external market environment. This result also affects Dazu Laser's cash flow . Financial report data shows that Dazu Laser's operating cost in the third quarter of 2022 was 6.706 billion yuan, a year-on-year decrease of 10.2%, lower than the decline rate of operating income of 11.5%, and the gross profit margin fell by 0.9%. The period expense ratio was 26.8%, an increase of 2.1% from the previous year. Operating cash flow fell from 277 million yuan to -669 million yuan, a year-on-year decrease of 341.4%.
According to Dazu Laser's explanation, the reason why the operating cash flow has declined so severely is mainly because sales collections have decreased during the reporting period, and there are more operating payments such as procurement payments and payment personnel compensation, taxes and fees. During the reporting period, investment in construction projects such as Dazu Laser CORACTIVE Industrial Factory, Yachuang Industrial Park, and Zhangjiagang Industrial Park increased.
Judging from the short-term results, Dazu Laser's current external environment has a great impact. Especially when it has multiple projects under construction, this status quo will pose a considerable challenge to the cash flow of Dazu Laser. However, the author believes that since these under-construction projects will significantly improve the delivery capacity of Dazu laser after they are put into production, they are all industrial construction projects related to Dazu laser's main business, and the impact on Dazu laser is still within the controllable range.
As a technology innovation enterprise that has been focusing on the laser industry since its establishment, Dazu Laser is still worthy of investors' attention in the long run.
Why is Dazun Laser still worthy of everyone's attention?
laser industry still has huge room for growth in the future. As a leading enterprise in China's laser industry, the author believes that Dazu Laser still has two major reasons worth investors' long-term attention.
Reason 1: Diversified business layout enhances enterprise risk resistance. Emerging businesses are growing rapidly
Dajia Laser's core business almost revolves around laser technology. As laser technology and related products are applied on a larger scale in more industries, Dazu Laser's revenue diversification process has accelerated, which will significantly reduce its dependence on individual industries, thereby enhancing the risk resistance of enterprises.
Judging from the existing business situation, Dazu Laser's diversified business layout has gradually become effective. In particular, the power battery business is growing rapidly. At present, the winding equipment, lamination equipment, and chemical component capacity testing equipment developed by Dazu Laser have formed prototypes and verified by downstream customers. It has the ability to supply power batteries in the entire line, and the number of orders has grown rapidly. Zhangjiagang Industrial Park, which is increasing investment and construction efforts, will also greatly enhance Dazu Laser's delivery capabilities in the power battery business.
From the perspective of market demand, Dazu Laser's power battery business will continue to grow, and first- and second-tier manufacturers including CATL, China Innovation Airlines, and Yiwei Lithium Energy are strengthening cooperation with Dazu Laser. If the current situation continues to develop, as long as Dazu Laser continues to deepen research and development around power battery equipment and maintains its dominant position, it will have the strength to seize the opportunity of rapid growth of the entire power battery and lithium battery processing industry and contribute more revenue to the company profit .
At the same time, with the release of new mobile phone products, with the increase in the popularity of MR\VR\AR related markets, the overall consumer electronics market will usher in new growth opportunities. Dazu Laser has been deeply engaged in the consumer electronics field for many years and has accumulated many years of laser marking/cutting/welding equipment. It is still hopeful to seize the new opportunities of consumer electronics products manufacturing and processing, so that the revenue of the consumer electronics sector will resume positive growth.
similar logic, Dazu Laser PCB equipment and high-power laser equipment are currently affected to varying degrees due to the macro environment. As Dazu Laser continues to enhance its R&D power and promotes the company's development with independent equipment, Dazu Laser has gradually made breakthroughs in the autonomous core components of its core components and is in a leading position in the Chinese local market. Against the backdrop of domestic substitution, Dazu Laser has been deeply engaged in the laser industry for many years. With its basic position of being the number one in Asia and third in the world, it is a rare enterprise in the market that can seize the opportunity of domestic substitution of high-power laser equipment.
At present, Dazu Laser's self-developed component MOPA pulse fiber laser has obtained the head customer order, and the harmonic reducer has been delivered in batches; the wafer processing equipment business is progressing smoothly, SiC ingot laser slicer and SiC ultra-thin wafer laser slicer are being mass-produced and verified, and the Micro-LED huge transfer equipment has passed the customer verification and has been sold to customers.
From this perspective, Dazu Laser's previous "old businesses" are waiting for the industry's prosperity to recover, and it is only a matter of time before these old businesses resume performance growth. The rapid growth of its new business will promote the overall development of Dazu Laser, accelerate its breakthrough achievements in core laser technologies, and thus promote it to bring laser technology into more fields to achieve corporate growth. According to the current diversified development trend of Dazu Laser's business, in addition to power batteries, more new businesses with strong growth will be worthy of investors' expectations.
Reason 2. Focus on laser for 26 years, it is a typical specialized and new enterprise
In 1996, Dazu Laser was established in Shenzhen. Over the years, it has always adhered to the research and development of laser-related products and technologies. It is a typical enterprise driven by technology products.
After 26 years of development, Dazu Laser has become Asia's largest manufacturer of industrial laser processing equipment, covering upstream core components such as laser and laser marking/cutting/welding equipment, becoming the enterprise with the highest degree of independence in China's laser industry.
At present, Dazu Laser continues to increase its R&D investment, with more than 16,000 employees, of which more than 35% of the R&D personnel are accounted for; it has 6,962 valid intellectual property rights, more than 5,000 domestic and foreign patents and more than 1,400 software copyrights, of which many of the core technologies are at the international leading level. Especially in recent years, Dazu Laser has been increasing its research and development efforts in components and high-power products, becoming the backbone of China's scientific and technological breakthroughs.
With the continuous increase in research and development, Dazu Laser has achieved some results in components. Its technology in laser light sources, laser focus heads, galvanometers, high-brightness pump sources, and CNC system have been greatly improved, and has been recognized by external customers.
Judging from the current layout of Dazu Laser's construction projects and investment business, in more than ten years of listing, Dazu Laser has not been involved in real estate, digital currency, and other hot spots. It has always insisted on the laser industry and always focused on the research and development of laser technology. This is very rare.
Time has allowed Dazu Laser to prove to the outside world that Dazu Laser is a truly "specialized and innovative" enterprise, and proved that Dazu Laser team is a group of people with a strong sense of national honor and excellent strategic determination. They are willing to steadily cultivate laser technology to help China's laser technology breakthrough. This focus and focus will make people more confident in this company.
The future of the laser market can be combined with more industries, and it still has huge growth imagination. With Dazu Laser's current market place, it is already a veritable leading enterprise in China's laser industry. When its future leading advantages of laser technology become more obvious, when laser technology is applied in more markets, Dazu Laser will also usher in higher speed growth.
Perhaps, this is also why professional investment institutions have also paid great attention to Dazu Laser. In the past 90 days, 8 institutions have given ratings, 7 of which gave buy rating , and 1 institution has given an rating of rating for overweight. Therefore, overall, Dazu Laser is indeed a company worthy of respect and long-term attention.
Article source: Songguo Finance, aims to provide lively and in-depth analysis of financial business value and be an attitude-oriented industry observer!
