The net profit of 2Q23 was 94 million yuan, and the gross profit margin increased significantly to 54.9%. 1H23 achieved revenue of 1.184 billion yuan (YoY-2.4%), net profit of 22 million yuan (YoY 49.9%), net profit of 2 million yuan (reversing losses), and comprehensive gross profit margin rose to 47.7% (YoY + 6.1pct). Of these, 2Q23 achieved a revenue of 640 million yuan (YoY-1.2% YoY713.0%, QoQ 19.5%), a net profit of 94 million yuan (YoY713.0%, reversing losses), a non-parent net profit of 80 million yuan (YoY 888.5%, reversing losses), and a comprehensive gross profit margin of 54.9% (YoY + 19.6pctQoQ + 16pct). The significant increase in gross profit margin is due to the improvement brought about by the change in income structure and the further appearance of scale effect of mass production business. The amount of the company's on-hand order is 2.14 billion yuan, of which 1.41 billion yuan is converted within one year.
Semiconductor IP licensing business: GPU, NPU and VPU licensing revenue accounts for nearly 80%. The royalty income of 1H23 semiconductor IP intellectual property authorization is 345 million yuan (YoY-11.5%), of which the number of 2Q23 authorizations is 61, the average revenue per authorization is 5.6626 million yuan (YoY 21.9%), and the realized income is 244 million yuan (YoY 53.8% focus QoQ 141.4%). The royalty income of 2Q23 was 26 million yuan, which remained stable compared with the previous month. In the first half of the year, GPU, NPU and VPU IP accounted for nearly 80% of the company's IP licensing business revenue, which was widely adopted by many well-known enterprises at home and abroad and played an important role in various application fields.
One-stop chip customization service business: gross profit margin of mass production business has increased significantly. The revenue from 1H23's chip design business / mass production business is RMB 247,000,000 (YoY-17.0% Universe 13.6%). Among the chip design business income, 14nm and below process nodes account for 52.3% of the revenue; 22.4% of the implemented chip design business projects come from 14nm and below process nodes. With the improvement of the company's chip mass production business ability to bring higher value to customers and higher bargaining power, the company's chip mass production business gross profit margin reached 26.82% (YoY + 5.78pct).
Actively layout data centers, automotive electronics and other incremental markets, take the lead to benefit from the AI era. In March, Lanyang Intelligent Technology released high-performance AI chips based on scalable Chiplet architecture deployed by Core GPGPU IP CC8400, NPU IP VIP9400 and VPU IPVC8000D, which are aimed at data center, high-performance computing, automotive and other applications. The company has provided VPU IP and 5nm one-stop chip customization services for data center acceleration cards of international leading chip companies. As the company's ability to provide complete hardware and software system solutions continues to improve, revenue from system vendors, large Internet companies and cloud service providers reached 520 million yuan (YoY 4.4%) in the first half of the year, accounting for 44.3% of total revenue (YoY + 2.9pct).
Investment advice: continue to be optimistic about the domestic semiconductor IP and chip custom leader, maintain the "buy" rating.
It is estimated that the operating income from 2023 to 2025 is 31.00,39.80 and 4.934 billion yuan, and the net profit is 1.26,2.18 and 326 million yuan respectively.
Risk tips: demand is not as expected; R & D is not as expected; international relations are deteriorating.