Event: on August 29, the company released its mid-2023 report. 1) the first half of 2023: revenue 384 million yuan, year-on-year + 2.36%, net profit 48.08 million yuan, year-on-year-17.59%, gross profit 38.94%, year-on-year-2.55pct, net profit 12.12%, year-on-year-3.34pct 2) 2023Q2: income 197 million yuan, year-on-year + 3.66%, month-on-month + 5.40%, homing net profit 27.6 million yuan, year-on-year + 11.69%, month-on-month + 34.77%, gross profit 38.8%, year-on-year-2.7pct, month-on-month-0.3pct, net profit 14.0%, year-on-year + 1.0pct, month-on-month + 3.0pct, inventory at the end of the second quarter was 197 million yuan, compared with the end of the first quarter + 5.4%.

The market share of home appliances continues to increase, and the effect of new energy distribution is realized, promoting both Q2 revenue and profits to grow compared with the previous month.

The company's revenue and profit increased in the second quarter on a month-on-month basis. From a business point of view: 1) Standard power chips are affected by the continued downturn in market demand, and downstream customers are more conservative in their inventory strategy, and the launch time of their new products is also delayed to a certain extent, resulting in a year-on-year drop in revenue of about 35% in the first half of the year. 2) based on technological advantages, household appliance chips have further expanded the share of white electricity and black electricity market. The company began to distribute white electricity in 2017 and mass production in the second half of 2020. The product category continued to be rich, and revenue in the first half of the year increased by more than 25% compared with the same period last year. 3) in terms of industrial control chips, the company invested heavily in the layout in the early stage and launched a full range of new power chips in the first half of the year. The new energy field represented by "photovoltaic inverter and energy storage" achieved revenue of more than 25 million yuan, driving the revenue of industrial control power chips to increase by nearly 10% compared with the same period last year.

Continuously launch and enrich new products for different markets. 1) White electricity ice empty washing market: continuously improve a series of products such as driver chips and power devices, match Gate Driver (HV&LV) and IGBT on the whole machine covered by AC-DC products, and improve the company's sales in the white electricity market. 2) Mobile phone brand market: the self-developed full set of highly integrated fast charge primary control power chips, secondary synchronous rectifier chips and PD protocol chips are gradually increasing, and the downstream application scenarios are from 10W to 200W, from silicon to gallium nitride. 3) Industrial-grade power market: in the first half of the year, a new generation of industrial-grade power management and driver chips with high performance, high reliability, impact resistance and interaction were developed, gradually forming a series of products. to contribute to the realization of independent control in the field of communication equipment power management and driver chips.

Continue to invest vigorously, the advantage of high-voltage technology platform is obvious. In the first half of 2023, 90.08 million yuan was invested in R & D, accounting for 23.44% of the income. Based on the "high and low voltage integrated technology platform" of independent research and development, the company has taken the lead in launching new products with market competitiveness in China for many times. Including but not limited to 700V monolithic integrated MOS power management chip, 1500V intelligent MOS power management chip, 1700V integrated SiC power management chip, zero watt standby high voltage industrial power chip, 600V/1200V half bridge driver chip, 200V SOI integrated LIGBT driver chip, high power digital totem column bridgeless PFC chip and so on. The company will always upgrade the technology platform and enrich the product line along the product route of "consumer grade-industrial grade-vehicle gauge level".

Investment advice: the company's 2023-2025 net return profit is expected to be 1480.201 Universe 287 million yuan, 2023-9-4 closing price corresponding to the PE valuation of 45-34-24 times, maintaining the "buy" rating.

Risk reminder event: downstream boom repair is not as expected; industry competition is further intensified