Q2 收入环比向上，宽带连接保持较快增长。公司上半年收入同比下滑主要由于去年国内运营商采购节奏前高后低，叠加世界杯推动海外运营商1H22 备货亦较多，构成了去年同期较高基数。Q2 机顶盒业务同比口径仍有承压，随着运营商（中移动）逐步进入采购期，Q2 收入环比回暖，我们预计下半年业绩释放的确定性很高（中移动机顶盒仍有2/3 未交付）。此外联通、电信将在9 月开启集采（根据采购官网，1500 万台左右），为年底至明年的收入增长构筑持续性。海外机顶盒表现亮眼，上半年收入超国内，印度、拉美、欧洲均有较强拉动。宽带连接业务增长相对亮眼，我们预计上半年增长10-20%，国内外需求均旺盛，海外占比提升亦较快，下半年增长有望进一步提速。Incidents:
The company released its annual report on 23. In the first half of the year, it achieved revenue of 5.17 billion yuan, down 17.1% year on year; realized net profit of 320 million yuan, down 35.4% year on year; of these, Q2 achieved revenue of 2.83 billion yuan, a year-on-year decline of 18.5%, and achieved net profit of 200 million yuan, down 29.3% year on year. Q2 revenue and profit were in line with market expectations.
Key points of investment:
Q2 Revenue increased month-on-month, and broadband connections continued to grow rapidly. The year-on-year decline in the company's revenue in the first half of the year was mainly due to the high and low purchasing pace of domestic operators last year, combined with the World Cup, which also encouraged overseas operators to stock up more 1H22, which formed a high base for the same period last year. The Q2 set-top box business is still under pressure. As operators (China Mobile) gradually enter the procurement period, Q2 revenue is picking up month-on-month, and we expect high certainty that performance will be released in the second half of the year (2/3 of China Mobile set-top boxes are still undelivered). In addition, Unicom and Telecom will begin collecting in September (around 15 million units, according to the official procurement website), building sustainability for revenue growth from the end of the year to next year. Overseas set-top boxes performed brilliantly. Revenue in the first half of the year surpassed domestic revenue, and India, Latin America, and Europe were all strongly driven. The broadband connectivity business is growing relatively well. We expect 10-20% growth in the first half of the year, strong domestic and foreign demand, and a rapid increase in overseas share. Growth is expected to accelerate further in the second half of the year.
The gross margin of the main business increased, and the loss-making business actively adopted adjustment measures. According to financial reports, the company's 1H23 comprehensive gross profit margin was 16.7%, down 1.5 pct from the previous year. However, in reality, the gross margin of the main business increased markedly. The gross margin of the smart terminal business increased 2.2 pct year-on-year in the first half of the year, the drop in prices of SOC main chips, WIFI chips, etc., and the decline in shipping freight charges were converted into momentum for the company's gross margin to increase, and the trend was determined. The small to medium size display module business in the first half of the year (estimated loss of around 80 million) hampered performance. The company took steps to actively intervene, such as optimizing the organizational structure, shifting to direct connections with brands, and expanding into other display business areas such as POS machines/robots/drones.
AI hardware is being actively promoted. According to financial reports, the company is actively following the development and application of artificial intelligence big language model technology at home and abroad. In April 2023, the company signed an Azure enterprise EA service agreement with Microsoft, including GPT 3.5 and 4.0 application services. Based on opening subscriptions in various overseas regions, the layout products include OTT boxes, projectors, AR glasses and other products combined with AI.
Lower the profit forecast and maintain the “buy” rating. Considering that the operator procurement pace is slow, we lowered our profit forecast. We expect the company to achieve revenue of 144/176/20.6 billion in 23-25 (the original forecast was 147/177/20.6 billion); realized net profit of 94/12.2/1.39 billion (the original forecast was 10.2/12.4/1.43 billion), and the current price corresponds to PE 16/12/11x in 23-25. Considering that the company has gone through the pressure period of performance in the first half of the year, the performance release momentum for the second half of the year is strong and the buying rating is maintained.
Risk warning: raw material/logistics prices have risen sharply; policy implementation has fallen short of expectations; risk of exchange rate fluctuations.
