Investment summary
Overview of events
On the evening of August 21, the company released an interim report of 2023, saying that in the first half of 2023, the company realized operating income of 884 million yuan, down 24.09% from the same period last year; realized return net profit of 128 million yuan, down 46.96% from the same period last year; and realized deduction of non-return net profit of 124 million yuan, a decrease of 45.38% over the same period last year.
Analysis and judgment
Revenue in the second quarter was gradually repaired and gross profit margin remained stable in the semiconductor downward cycle. Revenue in the second quarter was 468 million yuan, up 12.54% from the previous quarter; net profit in the second quarter was 70 million yuan, up 19.63% from the previous quarter; and gross profit margin in the second quarter was 38.23%, slightly lower than in the first quarter but stable as a whole. With the recovery of confidence in the consumer market, the high inventory in the market is gradually reduced to a relatively reasonable water level, the demand of the company's product lines is gradually stable, driving the company's revenue to be repaired gradually, and the company's long-term stable gross profit margin also shows the price resilience of various product segments.
Both supply and demand should be kept healthy. Supply side: the company's inventory turnover is in the leading position in the industry, the current inventory is stable, while the closed test price is low, promoting production side cost reduction; demand side:
The company continues to expand the market to develop new customers. At present, the proportion of major customer revenue has dropped from 75% to 68%. To a certain extent, the decline in customer concentration helps to disperse the company's operational risks; key customer innovation business will continue to drive the company's related business revenue.
Maintain high-intensity R & D investment, and the promotion of new products is progressing smoothly. The company has always maintained a high R & D expenditure rate, with a R & D expenditure rate of 17.24% in the second quarter, year-on-year + 3.27pct and month-on-month + 1.23pct. In the second half of the year, the company's three chips will contribute to revenue: the front-end high-performance IPC, which can be used as binocular and fisheye, has the advantage of market differentiation; the back-end 8K NVR will be upgraded again, leading the market; and the car regulation ISP chip is progressing smoothly, and the follow-up sales are expected.
The automotive electronics business is progressing smoothly and is looking forward to future volume. The company focuses on the field of vehicle vision chips, product application scenarios continue to increase, related products have entered the head enterprise high-end brands, basically through the first-class suppliers to cover the domestic mainstream vehicle factories. The domestic market share of DMS products is as high as 75%, and there is still room for a substantial increase in product penetration. CMS products take the lead in the market and account for 80% of the new high-end car rearview mirrors.
Investment suggestion
Maintain a "buy" rating. We adjust the company's estimated return net profit from 2023 to 2025 to RMB 3.38pm 4.02 / 514 million, compared with the same period last year, which is-15.0%, 18.9%, 27.8%, and the corresponding EPS is 1.47max, 1.75, 2.23 yuan, respectively, and the valuation of the corresponding PE is 33-28-22 times.
Risk hint
The company's research and development is not as expected, the recovery of terminal demand is not as expected, and the promotion of new products is not as expected.