Description of the event
On October 27, the company released its three-quarter report for 2023. The Q3 quarter alone achieved revenue of 6.223 billion yuan, +44.35% year-on-year, +37.58%; net profit after deducting non-return net profit of 209 million yuan, +206.25% year-on-year, and +306.90% month-on-month. The first three quarters achieved cumulative revenue of 15.081 billion yuan, -1.96% year-on-year; net profit after deducting non-return mother was 130 million yuan, -89.65% year-on-year.
Incident comments
Demand is picking up+new product delivery, and Q3 revenue is close to an all-time high. The company's Q1/Q2/Q3 revenue for the single quarter of this year was 43.35/45.23/6.223 billion yuan respectively. The revenue for the Q3 quarter alone increased sharply, +37.58% over the previous year. It is already very close to the 21Q2 level, which is very close to the 21Q2 record high over the past 21 years, with 21Q2 revenue of 6.236 billion yuan. Along with the gradual recovery of downstream demand, with the help of the company's new products, revenue from the semiconductor design business achieved significant growth. The 23Q3 semiconductor design business achieved revenue of 5.446 billion yuan, accounting for 87.52% of revenue, and the 23H1 semiconductor design business achieved revenue of 7.390 billion yuan, accounting for 83.43% of revenue. We believe that with the mass production and delivery of the company's new 50 megapixel or more image sensors, product revenue in the mobile phone sector is expected to grow steadily.
Actively promote inventory removal, and the effect of improving profit is evident. The company is actively promoting inventory removal. The inventory value at the end of the Q1/Q2/Q3 period this year was 107.69/98.28/7.552 billion yuan, respectively, a decrease of 12.84%/20.46%/38.88% from the end of the previous year. The inventory reduction amount for the Q1/Q2/Q3 single quarter was 15.87/9.41/2277 billion yuan, and the removal rate accelerated. This year's Q1/Q2/Q3 gross margin for the single quarter was 24.72%/17.30%/21.78%, respectively. With the gradual optimization of the company's revenue structure, the Q3 gross margin level improved markedly month-on-month. We believe that with the launch of the company's new high-end image sensors and the reduction in product costs, the company's product structure and cost structure will continue to improve and optimize, and the overall profitability will increase steadily.
Outline a huge semiconductor blueprint, and long-term high growth can be expected. Through endogenous growth and epitaxial mergers and acquisitions, the company has drawn up a huge semiconductor blueprint covering businesses such as CIS, TDDI, discrete devices, power management ICs, and LCOS. In the future, it will fully benefit from the expansion of the industry and the continuous strengthening of its competitive advantage. As the company's core business, the automobile CIS is a high-ASP, high-growth race track and is expected to continue to contribute incrementally, and the company has outstanding competitiveness in many CIS fields. With its existing technical strength and brand power, the company is progressing smoothly in new business development. It will continue to expand application fields and product lines in the future, and the company's growth ceiling will open up. The company is expected to build more first-class products used in the automotive, VR/AR and other fields in the future.
We believe that the pan-analog chip industry where the company is located is a good racetrack in the long slope. As an excellent player in the growth circuit, the company's competitiveness is at the leading global level, and future growth can be expected. At the same time, the company will continue to expand into car-grade products, increase the value of participation in bicycles, and build a pan-analog semiconductor platform. We expect the company's 2023-2025 EPS to be 0.74, 1.82, and 2.51 yuan respectively, maintaining the company's “buy” rating.
Risk warning
1. Vehicle shipments to the CIS fell short of expectations;
2. The recovery of the mobile phone industry fell short of expectations.