The company's 1H23 performance is under pressure in the short term, and its 2Q23 performance has improved markedly month-on-month. The company is a leader in automotive CIS packaging technology and is actively deploying automotive GaN technology. In the future, it will benefit from increased demand for automotive CIS and accelerated penetration of GaN.
Key points of investment:
Maintain the “increase in holdings” rating and lower the target price by 30.50 yuan. Considering that the impact of weak demand for downstream terminals has not been completely eliminated, the company's EPS for 2023-2025 was lowered to 0.33/0.61/0.85 yuan (previous value was 0.47/0.66/0.89 yuan). Consider the company as a leader in wafer-level chip size packaging, grant 50x PE in 2024, lower the target price by 30.50 yuan, and maintain the “increase in holdings” rating.
Short-term performance pressure fell short of expectations, and 2Q23 performance improved markedly month-on-month. The company 1H23 achieved revenue of 482 million yuan, YoY -22.34%, net profit of 77 million yuan, YoY -59.89%, net profit of non-attributable income of 59 million yuan, YoY -65.56%, mainly due to weak market consumer demand compounded by pressure on the industry to remove inventory. 2Q23's performance improved significantly from month to month, achieving revenue of 259 million yuan, YoY -17.98%, QoQ +15.83%, net profit of 48 million yuan, YoY -51.51%, QoQ +68.18%, after deducting non-return net profit of 39 million yuan, YoY -55.65%, and QoQ +90.05%.
A leader in automotive standard CIS packaging technology, actively deploying automotive GaN technology. The company continues to increase its shareholding ratio in Anteryon in the Netherlands and actively expands the scale of mass production of wafer-level optical device (WLO) manufacturing technology in the field of intelligent automotive projection. In the future, it will benefit from the growth in automotive CIS demand brought about by the trend of intelligent automobiles. The company acquired 51.37% of ViSIC's shares. Currently, ViSIC is cooperating with well-known international automakers to develop 800V and above automotive GaN products. According to Yole Group's forecast, the GaN device market for power applications will rapidly expand at a compound annual growth rate of 56% from 2022-2027, and reach 2 billion US dollars in 2027. As the penetration of GaN power device products accelerates, the company will continue to benefit.
catalyst. Vehicle CIS is recovering at an accelerated pace; new breakthroughs have been made in automotive GaN product technology research and development.
Risk warning. Downstream demand fell short of expectations; new product development progress fell short of expectations.