Event: The company released its 2023 performance forecast. In 23, it achieved operating income of 951-1,087 million yuan, a year-on-year increase of 40%-60%; achieved net profit of 1.97-223 million yuan, an increase of 50%-70% over the previous year; and realized net profit after deducting non-return to mother of 1.66-189 million yuan, an increase of 40-60% year on year.
Strong performance for the full year of '23. Based on the median performance forecast, revenue of 1,019 billion yuan was achieved in 23 years, +50% year over year; of these, 23Q4 achieved revenue of 451 million yuan, +77% year over year and +110% month over month. Net profit to mother was 210 million yuan in '23, +60% year-on-year; of these, 23Q4 achieved net profit of 100 million yuan, +85% year-on-year and +153% month-on-month. Net profit from non-return to mother was achieved in '23 million yuan, +50% year-on-year; of these, 23Q4 achieved net profit of 95 million yuan, +88% year-on-year and +200% month-on-month.
Domestic market: grasp the major trends in the 4K to 8K industry and release products quickly. Information video and ultra-high-definition video have become a development trend in the global information industry. Video has evolved from traditional standard definition and high definition to 4K, and is currently developing in the direction of 8K and AR/VR. At the same time, the LED display control industry's application scenarios continue to increase, driving the company's core product shipments to grow rapidly, and the revenue growth rate is obvious. In the future, the company will continue to lengthen the product chain and increase the value of the company's products in a single project, which is expected to become a new fulcrum for performance growth.
Overseas markets: enhance the influence of overseas markets and increase the construction of marketing outlets. 1) Enhancing influence in overseas markets: In '23, the company participated in large-scale exhibition events such as ISE2023 Barcelona, Spain, the 2023 Las Vegas Radio and Television Show (NAB), and the 2023 International Smart Display and System Integration Exhibition (ISLE), and held large-scale product promotion conferences in Dubai, Malaysia, etc., which attracted many international customers to negotiate and sign contracts with the company; 2) Increase the construction of marketing outlets in North America and Europe in '23, increasing the coverage of overseas markets for high-end products. In the future, the company will continue to expand overseas markets (Southeast Asia and other markets). The smooth expansion of overseas markets has contributed to incremental revenue and raised the overall gross margin level of the company's products.
Equity incentives: An equity incentive plan was announced in '23, showing confidence in the company's future performance. The company announced an equity incentive plan in July 23. The performance assessment conditions (any one condition can be met) are: 1) revenue level: based on the company's 2022 revenue, which is not less than 50%/125%/238% compared to the 22-year revenue; 2) net profit level: based on the company's 2022 revenue, the 23/24/25 net profit level is not less than 50%/125%/238%, respectively, showing confidence in performance.
Investment advice: Maintain profit forecasts and maintain a “buy” rating. The estimated revenue for 2023-2025 is 1,049/16.04/2,433 billion yuan, with growth rates of 54%/53%/52%, respectively; net profit to mother of 2.00/3.04 billion yuan, corresponding to current PE of 25/16/10 times, respectively, maintaining the “buy” rating.
Risk warning: risk of high customer concentration; risk of high concentration of agent procurement; risk of iterative upgrading of technology; risk of market competition.