Events:
On October 20, 2023, the company released its third quarter report of 2023. During the reporting period, the company achieved operating income of 211 million yuan, down 17.34% from the same period last year; the net profit returned to the mother was-9.9183 million yuan, down 128.81% from the same period last year. The company achieved a cumulative operating income of 541 million yuan in the first three quarters of 2023, down 20.96% from the same period last year, and its net profit was-27.6397 million yuan, down 141.06% from the same period last year.
The scale of revenue improved quarter by quarter, and the loss in the third quarter narrowed compared with the previous quarter.
In the first three quarters of 2023, the company's revenue in the first three quarters of 2023 was 181 million yuan, which was improved for two consecutive quarters compared with the previous quarter; the net profit of returning to the mother was-319.32 million, respectively, and the decline in net profit in the third quarter was narrower than that of the same period last year. The company's three-quarter report pointed out that the main reason for the decline in performance was that the price reduction of some products led to a decrease in gross profit margin and a decrease in gross profit. In addition, the company prepared for inventory depreciation in accordance with the principle of prudence and based on factors such as business development and industry changes. As of the end of the reporting period, the asset impairment loss was-12.4658 million yuan, an increase of 74.49% over the same period last year. We believe that with the growing demand for 400G/800G optical modules in global data centers and the start of construction of the domestic 400G backbone network, the company's performance is expected to continue to grow and profitability will improve quarter by quarter.
Continue to focus on optical chip products and continuously strengthen investment in research and development
The company invested 79.318 million yuan in R & D in the first three quarters, an increase of 34.07% over the same period last year, of which 30.0332 million yuan was invested in R & D in the third quarter. The projects under research include CW DFB chip and TOSA device, VOA array chip industrialization project, silicon optical transceiver module engineering research, key technology and technology development of PLC photonic integrated chip, high-power DFB laser and high-speed EML laser chip, some of which have entered the stage of mass production. According to the demand of 400G/ 800G optical module in data center, the company developed DR4/DR8 parallel optical module and realized small batch supply; in the aspect of active chip, the high power DFB chip for silicon optical application realized the power output greater than 100mW at 85 ℃, and 25G 1286nm DFB laser was sent to the customer for verification.
Earnings forecast, valuation and rating
We estimate that the company's revenue from 2023 to 2025 will be RMB 933 million, with year-on-year growth of 3.24%, 19.27%, 18.42%, and net profit of 0.66, 1.10 and 1.44 million, respectively, with year-on-year growth of 2.22%, 66.99%, 31.33%, 0.14, 0.24, 0.31 per share, and 30.88 per cent, respectively, respectively. Considering the smooth progress in the research and development of passive and active chips in the data center 400G/800G field during the reporting period, and the small batch delivery of some products, we believe that the computing power demand in the data center brought about by AI brings a good opportunity for the company's performance growth, and we suggest that we continue to pay attention to it.
Risk hints: market demand is lower than expected risk, product research and development is less than expected risk, international trade disputes aggravate risk.