1H23 performance is lower than market expectations.
Silipu announced 1H23 results, operating income was 612 million yuan, down 38.68% from the same period last year; net profit was 14 million yuan, down 94.01% from the same period last year; excluding the influence of share payment fees, the net profit was 56 million yuan, down 85.93% from the same period last year The comprehensive gross profit margin was 54.74%, down 3.58ppts from the same period last year, and the performance was lower than market expectations, mainly due to the decline in end-market prosperity and weak downstream demand.
Trend of development
Signal chain products and power management products dual-drive, accelerate platform layout. The revenue of 1H23's signal chain chip products was 481 million yuan, down 31.03% from the same period last year, the revenue accounted for 78.53%, and the gross profit margin was 56.63%, down 5.26 2.18ppts from the same period last year; the revenue of power management chip products was 128 million yuan, down 57.63% from the same period last year, 20.85% from the same period last year, and 47.90% from the same period last year. We believe that the decline in revenue is mainly affected by the decline in end-market demand and the destocking of downstream customers. We are optimistic that the company will maintain the advantage of signal chain chips, expand the product line of power management, and achieve platform layout.
Product line continues to expand, epitaxial mergers and acquisitions enhance competitiveness. 1H23 company continues to improve the product line, according to the company announcement, the signal chain company launched a variety of automotive specification-level chips, including CAN transceiver, SARADC, etc.; in the field of power management, the company's high-end DC/DC products, PMIC, linear voltage regulators and automotive specification transformer driver chips and other products mass production; at the same time, the company's first MCU product has been verified in the client. In addition, according to the company announcement, the company intends to acquire Chuangxin Micro, a high-quality enterprise focusing on the field of power management. Chuangxin micro products include battery management chips such as battery protection IC, switching power supply chips and other power management chips, mainly used in the field of consumer electronics, and the products have been imported into a number of major customers at home and abroad.
We believe that Chuangxin Micro's business layout and downstream applications are expected to form a complementary relationship with the company, and if the acquisition is successful, the company is expected to further enhance its technological strength and make use of the synergy with the target company to enhance its long-term competitiveness through the layout of new product lines and the development of downstream sales channels.
We will maintain a high level of R & D investment and build a solid technological advantage. 1H23's R & D investment was 283 million yuan, down 4.83% from the same period last year, while R & D investment accounted for 46.26% of revenue, up 16.45 ppts from the same period last year. The number of R & D personnel reached 508, an increase of 34.39% over the same period last year. We believe that the company's high level of R & D investment will help to build a solid technological advantage and enhance the company's long-term competitiveness.
Profit forecast and valuation
Taking into account the impact of weak end demand on the company's performance, we cut the company's 2023max 2024 profit forecast by 37.3% to 295511 million yuan. Maintain the company's outperform industry rating, lower the target price by 25.2% to 258.20 yuan, corresponding to 35 times forward price-to-earnings ratio in 2026, mainly referring to the average valuation of comparable companies, and the target share price has 15.1% upward space compared with the current stock price.
Risk
The progress of new product research and development is not as expected; the introduction of customers is not as expected; the downstream prosperity is not as expected.