Event: according to the company's semi-annual report on 2023, the revenue of H1 company in 2023 was 302 million yuan, down 3.85% from the same period last year; the net profit was 1 million yuan, down 97.46% from the same period last year; and the non-net profit was deducted from-18 million yuan, down 137.42% from the same period last year. On a quarterly basis, the company's Q2 revenue in 2023 was 169 million yuan, an increase of 16.14 percent over the same period last year, an increase of 27.95 percent over the same period last year; the net profit returned to the home was 4 million yuan, down 84.12 percent from the same period last year, an increase of 257.12 percent; and the non-net profit was deducted from-6 million yuan, a decrease of 129.86 percent over the same period last year and an increase of 46.74 percent.

Q2 continued revenue growth and improved profitability compared with the previous year: benefiting from the initial signs of a pick-up in terminal demand in the market, the company continued the growth of operating income since Q4 in 2022, with an increase of 27.95% month-on-month in 23 years. In 23, H1 company's gross profit margin was 23.88%, year-on-year-11.44pcts; net profit margin was-1.75%, year-on-year-17.73pcts. Thanks to the company's active exploration of new areas and continuous introduction of new products, the 23-year Q2 gross profit margin is 25.00%, year-on-year-7.95pcts, month-on-month + 2.56pcts; net profit rate is 0.01%, year-on-year-14.77pcts, month-on-month + 4.01pcts. In terms of expenses, the rates of sales, management, R & D and financial expenses of H1 company in 23 years were 2.54%, 4.97%, 14.31%, 0.56%, respectively, and the year-on-year changes were + 0.98/+0.45/+1.91/-0.27pcts. In the first half of 23, in order to meet the needs of the company's future product layout and business development, the company continued to increase product layout and vigorously expand high-end talents. during the period, sales expenses and R & D expenses increased by 51.82% and 56.65% respectively compared with the same period last year, affecting the company's net profit performance.

Product volume leads to the increase of market share, and technology research and development is expected to broaden the application field: the company relies on leading technical strength, reliable product quality and quality customer service, the product share used in new consumer electronics, industrial control, network communications, data centers and automotive electronics continues to grow, and the product structure continues to be optimized. The company takes AC-DC chip as the starting point, DC-DC, linear power supply, grid driver and other chip solutions continue to expand in fast charging, household appliances, building automation, security and fire protection, server / data center power supply, power conversion and energy storage and other applications. Among them, the company's sales in the field of household appliances increased by more than 40% compared with the same period last year. In the aspect of LED driver, the company has successfully entered the leading customer supply chain of many high-power LED lighting industry by virtue of the high-performance domestic scheme of "PFC+LLC/LED driver". At the same time, the company continues to expand research and development and market layout in the field of battery management chips, actively develop and support daisy chain cascaded BMS AFE chips, and promote ISO26262 functional safety standard certification, targeting large-scale energy storage systems and new energy vehicles.

Equity incentive objectives are clear, highlighting long-term growth confidence: the company's restricted stock incentive plan awarded for the first time in 2023, a total of 156 people, including the technical backbone, business backbone.

The incentive plan intends to grant 1.162 million restricted shares to the incentive target, accounting for about 1.68 per cent of the company's total share capital. Among them, 930000 shares are granted for the first time, 232000 shares are reserved, and the grant price is not less than 35 yuan per share. The company's performance evaluation target is set as follows: based on operating income in 2022, the growth rate of operating income in 23-25 is not less than 30%, 65%, 125%, respectively. The clear assessment objectives of the incentive plan demonstrate the company's confidence in long-term performance growth, fully mobilize the enthusiasm of the company's core team, and combine the company's interests with shareholders and employees. Promote the construction and stability of the core team of the company, which is conducive to the long-term development of the company.

Maintain "overweight" rating: the company continues to work in the direction of AC-DC chips. The company's existing product line has been expanded to power management chips such as AC-DC, DC-DC, driver IC, linear power, battery management, and has expanded the research and development of signal chain chips such as amplifiers, converters and sensors, which are widely used in consumer electronics, industrial control, network communications, data centers, automotive electronics and other fields. Provide one-stop chip solutions for mainstream manufacturers at home and abroad. In June, 23, based on the purpose of industrial integration and coordinated development, the company completed the holding of moving Core Micro Chengdu and opened a new strategy and layout of motor drive control and magnetic sensor business. The company actively opens up new areas and continues to launch new products, and the performance growth momentum is relatively good. It is estimated that the return net profit of the company from 2023 to 2025 is 55 million yuan, 104 million yuan and 174 million yuan, and the EPS is 0.80,1.51,2.52 yuan respectively, and the corresponding PE is 62x, 33x and 20x respectively.

Risk tips: new product research and development is not as expected, downstream demand recovery is not expected, inventory price risk, market competition risk.