Nanoscin released its 2023 performance report. In 2023, it achieved revenue of 1,311 billion yuan, yoy -21.51%. In a single quarter, 23Q4 achieved revenue of 310 million yuan, yoy -21.3%, and QoQ +11.9%. In terms of profit, net profit to mother was achieved in 2023 - 236 million yuan, yoy -194.21%, and in 23Q4, net profit to mother was about 15 million yuan, reversing losses from month to month. We have seen that during the downward cycle of the industry, customers continued to remove inventory, and prices were under pressure due to weak demand, but the company's R&D investment and market development continued to advance, so expenses increased during the period; in addition, equity incentives in 2023 brought about amortization expenses of about 221 million yuan. If this impact is excluded, net profit returned to mother for the whole year was -15.08 million yuan.
Demand for automotive electronics has picked up significantly, and the industrial market has rebounded steadily. 2023Q3 revenue is divided by application: automotive electronics accounts for about 32%; consumer electronics accounts for about 13%; pan-energy accounts for 56% (industrial automation accounts for 18%; photovoltaics and energy storage accounts for 16%; digital power accounts for about 10% of revenue). The penetration rate of new energy vehicles has increased steadily, the 2023Q3 automotive electronics market has clearly picked up, and the company's automotive electronics revenue has increased significantly month-on-month. The industrial market began to remove inventory in 2022H2, and demand began to rise steadily in 2023Q3.
New isolation+power management products are blooming, and 2024 is about to be released. Isolated drive products with protective functions have been mass-produced in main drive applications for some NEV customers; functional safety main drive isolated drive products are expected to be mass-produced in 2024; leading customers of photovoltaic inverters and industrial motor drives are implementing isolated drives to replace optocoupler drives. The company's single-channel/three-channel/12-channel taillight LED driver chips were successfully introduced to leading automotive headlight customers and shipped on a large scale; next-generation isolated half-bridge drive and multi-channel half-bridge motor drive products were mass-produced in 2023Q3; power supply LDO has already been introduced to some customers; and products related to high-side switches are expected to be mass-produced in 2024.
Profit forecasts and investment suggestions: Optimistic that the company continues to break through in automotive-grade products and magnetic sensor chips, acquire Quantum Micro's product matrix to build an analog chip platform company. We expect the company's 2024/2025 revenue of 23.01/2,852 billion yuan and net profit of 135/393 million yuan to maintain a “highly recommended” rating.
Risk warning: Downstream demand falls short of expectations, new product development progress falls short of expectations, overseas manufacturers compete.