Revenue for the first three quarters of 23 years was -6.3% year-on-year. Net profit was affected by the shift in the IP settlement cycle and fell short of expectations.
Revenue for the first three quarters of 2023 was 1,765 billion yuan, down 6.3% year on year, net profit of the mother - 134 million yuan, net profit from profit to loss, minus net profit - 156 million yuan, from profit to loss, year over year, from profit to loss; gross profit margin was 43.42%, up 2.83 pct year on year. The year-on-year increase in gross margin was a year-on-year increase in gross margin of the one-stop chip customization business.
23Q3 had quarterly revenue of 581 million yuan, down 9.9% month-on-month, net profit of $156 million, net profit of $156 million, net profit from loss over month, net profit minus $158 million; gross profit margin was 36.11%, down 18.83pct from month to month. The month-on-month decline in gross margin was mainly due to the shifting settlement cycle of high-margin IP authorized business customers.
23Q3 chip mass production revenue was +37.0% month-on-month, and IP revenue fluctuated due to delays in customer decisions.
23Q3's IP licensing business revenue for the single quarter was 122 million yuan, down 55.0% month-on-month, of which IP licensing revenue was 94 million yuan, a decrease of 61.7%, and royalty revenue of 28 million yuan, an increase of 7.2% over the previous month. The month-on-month decline in IP licensing revenue was mainly affected by delays in customer R&D decision time, and the number of IP licenses granted by 23Q3 companies fell to 18 times (23Q2 31 times, 23Q1 30 times).
23Q3's one-stop chip customization business revenue for the single quarter was 457 million yuan, up 23.4% month on month, of which chip design revenue was 131 million yuan, down 1.1% month on month, and chip mass production revenue was 326 million yuan, up 37.0% month on month. The gross profit margin of the chip mass production business was 26.77% in the first three quarters of 23 years, an increase over the previous year. It is estimated that the gross profit margin of the chip mass production business was 26.69% in the single quarter of 23Q3, which was basically the same from month to month, and the scale effect was evident.
Ongoing orders reached 2,058 billion yuan, and the conversion amount within one year accounted for 64.9%. The certainty of future revenue is high.
By the end of 23Q3, the company had sufficient on-hand orders, reaching 2,058 billion yuan, down 4.0% from the end of the previous quarter. Among them, the total amount of orders for one-stop customized services was 1,605 billion yuan, accounting for 78.0%. The total amount of on-hand orders converted within one year was 1,336 billion yuan, accounting for 64.9%, and the certainty of future revenue was high.
The NPU IP computing power can reach 400 TOPs, continuing to help leading customers such as Microsoft apply AI.
The company's NPU IP can reach 400 TOPs of computational power after being expanded through multiple convolutional computation cores, which can be better applied to the AI field. 23H1 joined hands with Microsoft to deploy the Windows 10 IoT enterprise operating system for IoT edge devices, and the company is actively deploying in the data center market. It has provided video transcoding technology and 5nm one-stop chip customization services for data center acceleration cards of leading international chip companies.
The domestic IP & ASIC unicorn embraces Chiplet's 100 billion market and maintains a “buy” rating.
The emergence of AIGC such as ChatGPT marks an epoch-making moment for AI, and VeriSilicon is expected to benefit fully as the domestic IP leader & ASIC king. Net profit for 2023-2025 is estimated to be 0.08/0.53/098 million yuan, corresponding to 23/24/25 PE of 3480.5/544.8/295.5 times, maintaining the “buy” rating.
Risk warning: international trade friction risk; technology licensing risk; intellectual property risk; technology upgrade iterative risk.