Event: according to the company's semi-annual report for 2023, H1 realized revenue of 339 million yuan in 2023, an increase of 7.5% over the same period last year, and its net profit was 32 million yuan, down 45.2% from the same period last year. Of this total, Q2 achieved revenue of 184 million yuan in the single quarter, up 5.5 percent from the same period last year, up 18.6 percent from the previous quarter; and the net profit from its mother was 16 million yuan, down 53.6 percent from the same period last year, up 4.7 percent from the previous year.
Short-term performance under pressure, do not change the long-term trend for the better. From the revenue side, H1 achieved revenue of 339 million yuan in 2023, an increase of 7.5% over the same period last year; from the profit side, the company achieved a net profit of 32 million yuan belonging to shareholders of listed companies during the reporting period, a decrease of 45.2% over the same period last year. The main adverse factors affecting the company's short-term performance are:
(1) the complex macro operating environment and macroeconomic fluctuations had a negative impact on the company's customer demand, supply chain logistics, production and operation, and the war between Russia and Ukraine continued to affect the company's overseas business; (2) optical communication business during the reporting period, the demand for telecommunications and digital communication has declined.
Government subsidies reduced the growth of superimposed R & D costs, and profitability declined slightly. In terms of gross profit margin, the company's gross profit margin of H1 in 2023 was 33.7%, down 3.7 ppm from the same period last year; in terms of net profit, the net profit margin of H1 in 2023 was 9.4%, down 9pp from the same period last year. The pressure on the company's profitability is mainly due to (1) the company increased investment in research and development of new products and processes, such as thin film lithium niobate high-speed modulator chips and devices, self-driving car lidar light source modules, etc., and R & D expenses in the first half of the year increased by 17.94 million yuan over the same period last year, an increase of 39.7% over the same period last year; (2) government subsidies decreased by about 10.39 million yuan. (3) during the reporting period, the demand of the industrial laser industry was insufficient, the competition in the domestic market was fierce, and the price of fiber laser devices decreased compared with the same period last year.
Benefiting from AIGC, thin film lithium niobate is expected to usher in new opportunities. Since the beginning of this year, AIGC has been catalyzed continuously, the demand for computing power has increased sharply, and the iterative rate of updating 800G/1.6T optical modules has been accelerated. With the rapid development of network and data communication, the core optical network is upgraded to ultra-high speed and ultra-long distance transmission, and the demand for optical communication backbone network is also increasing. Thin film lithium niobate modulator is the core optical device of optical communication backbone network. Because of its inherent advantages, it will usher in a great opportunity for development. The company is focusing on the development of 800G and above thin film lithium niobate coherent and incoherent modulator products, which is expected to usher in a breakthrough in the year 24 to 25.
Profit forecast and investment advice. It is estimated that the EPS from 2023 to 2025 will be 0.41,0.60 and 0.84 yuan respectively, corresponding to 109,74,53 times PE respectively, and will be given a "hold" rating for the first time.
Risk tips: macroeconomic fluctuation risk, raw material price fluctuation risk, downstream customer demand fluctuation risk, market competition aggravating risk, fund-raising project progress or less than expected, and so on.