Event
On August 22, 2023, the company released the semi-annual report of 2023. From January to June in 2023, the company achieved operating income of 884 million yuan, down 24.09% from the same period last year, and the net profit returned to its mother was 128 million yuan, down 46.96% from the same period last year.
Main points of investment
23H1 price is under pressure, Q2 month-on-month rise. According to the company's semi-annual report for 2023, the company achieved 884 million yuan in operating income in the first half of the year, down 24.09 percent from the same period last year, while the net profit returned to its mother was 128 million yuan, down 46.96 percent from the same period last year. Of this total, Q2 realized revenue of 468 million yuan, down 27.94% from the same period last year, but increased by 12.54% compared with the same period last year. Q2's net profit was 70 million yuan, down 50.24% from the same period last year, and up 19.63% from the previous year. In the first half of the year, in the face of the adverse effects of the semiconductor downward cycle, the global economic slowdown, sluggish terminal demand and international trade conflicts, the company team worked hard to overcome external environmental resistance and maintained good resilience. 23Q2 revenue and profits began to rise month-on-month. As consumer market confidence rebounded, high market inventories gradually reduced to a relatively reasonable level, and downstream terminal equipment market demand is expected to pick up. The demand of each product line has shown a certain degree of stability.
Investment in R & D has been continuously strengthened, and results continue to emerge. In the first half of the year, the company invested 147 million yuan in R & D, accounting for 16.66% of business income, mainly invested in high-performance artificial intelligence edge computing chip projects, vehicle image signal processing and transmission link chipsets, high-performance visual processing SoC project, new generation system platform project, multi-standard video codec project development, as well as new technology pre-research, R & D manpower, etc., a total of 27 new intellectual property rights Among them, there are 20 new patents (17 invention patents and 3 utility model patents). Two new copyrights for layout-design of integrated circuits (4 expired) and 9 copyrights for computer software have been added. At present, the company has 407 R & D personnel, accounting for 84% of the company's total employees, 201 with master's degree or above, accounting for 49% of R & D personnel, and 203 with bachelor's degree, accounting for 50% of R & D personnel.
The superposition of factors leads to higher incremental demand. From each business segment, the revenue of professional video processing products is about 614 million yuan, with a gross profit margin of 38.1%; that of Wisdom products (general video processing) is about 141 million yuan, with a gross profit margin of 33.6%; and that of smart car dealers is about 73 million, with a gross profit margin of 39.5%. The overall gross profit margin is at a stable level. For professional products, three chips are expected to contribute to revenue in the second half of the year, including front-end high-performance IPC products, back-end 8KNVR re-upgrade and car regulation ISP chips. at present, the products are progressing smoothly, and the completion of design introduction is expected to generate sales revenue contribution in the second half of the year. In addition, the streaming media rearview mirror products have unique zooming and picture translation functions in the whole market, with a market share of more than 80% of the new products. In the future, in the field of visual perception, the manufacturing industry will usher in intelligent upgrading and transformation, and all kinds of industrial application scenarios will expand the demand for machine vision chips. The company's intelligent SoC vision chips are expected to usher in new development opportunities and market space. In the field of vehicle vision chip, many brand car manufacturers and Tier1 solutions are imported with high quality performance. As the key layout of the company, the field of vehicle vision chip has more and more application scenarios, which will bring a broad market space.
Investment suggestion
From 2023 to 2025, we estimate that the company will receive 21.53 pounds 24.83 / 2.929 billion yuan respectively, and its net profit will be 3.81 million yuan respectively. The current stock price corresponds to 29 times, 24 times and 20 times of PE in 2023-2025, respectively, giving it a "buy" rating.
Risk Tips:
The recovery of market demand is not as expected; the progress of new products is not as expected; the market competition is intensified and so on.