Event: the company released its Triple report for the year 2023. In the first three quarters of 2023, revenue reached 5.642 billion yuan, an increase of 14.13 percent over the same period last year, and a net profit of 2.031 billion yuan, an increase of-0.48 percent over the same period last year.
Main points of investment
Q3 net profit fell 24.21% from the same period last year, while R & D expenses remained high: revenue in the first three quarters of 2023 was 5.642 billion yuan, an increase of 14.13% over the same period last year, and net profit was 2.031 billion yuan, an increase of-0.48% over the same period last year. Of this total, revenue reached 19.08 yuan in the third quarter of 2023, an increase of-6.08% over the same period last year. The net profit was 639 million yuan, an increase of-24.21% over the same period last year. In the first three quarters of 2023, the company's R & D expenditure was 1.045 billion yuan, an increase of 38.01% over the same period last year, mainly due to the increase in the company's R & D labor costs. The book value of the company's monetary funds was 2.596 billion yuan, a decrease of 36.15% compared with the beginning of the year, mainly due to the large net cash outflow caused by the company's purchase of short-term capital preservation bank financial products and large certificates of deposit and share buybacks in the current period.
Transfer of 100% equity interest in Tangshan Jingyuan Electronics Co., Ltd.: according to the needs of business development, Tangshan Guoxin Jingyuan Electronics Co., Ltd., a wholly-owned subsidiary of the company, transferred its 100% equity stake in Tangshan Jingyuan Electronics Co., Ltd. through the Hebei property rights market, with a transaction price of 47.9597 million yuan. On September 6, 2023, the registration procedures for industrial and commercial change of equity change were completed.
The company benefits from the increase in domestic alternative demand and downstream demand: the company is a domestic integrated circuit company, with special integrated circuits and intelligent security chips as its two main industries. At present, with the rapid development of high-end industries such as system control and information technology in China, the demand for special integrated circuits is strong, the localization rate of the domestic market is still relatively low, and the demand for domestic substitution is large, which will provide a considerable demand market for the company. Products are widely used in finance, telecommunications SIM cards, social security, urban public transport, M2M, medical and health care, mobile payment, identification, communication base stations, automotive electronics, industrial control, instrumentation, Internet of things and many other fields. With the development of 5G communications, automotive electronics and other fields, the downstream demand will continue to increase, and the demand for the company's products will continue to increase, which provides a broad market space for the company.
Profit forecast and investment rating: the company's performance is in line with expectations, taking into account the company's leading position in the domestic special integrated circuits, as well as the price reduction pressure of special integrated circuits, we adjust our previous forecast that the company's return net profit in 2023-2025 is expected to be 27.16 (- 5.37) / 36.99 (- 5.51) / 46.21 (- 622) million yuan, corresponding to PE in 23-17-14, respectively, maintaining the "buy" rating.
Risk tips: 1) the company's R & D is not as expected; 2) the market demand is not as expected; 3) the market competition is intensified.