Incidents:
On February 23, 2024, Nanoscin released the 2023 performance report: in 2023, it achieved operating income of 1,311 billion yuan, a year-on-year decrease of 21.51%, net profit to mother - 236 million yuan, a year-on-year decrease of 194.21%, after deducting net profit of non-return to mother - 322 million yuan, a year-on-year decrease of 290.19%.
According to the performance report estimates, in the fourth quarter of 2023, the company achieved operating income of 310 million yuan, a year-on-year decrease of 21.31%, a month-on-month increase of 11.93%, a net profit of 0.15 million yuan, a year-on-year increase of 65.73%, turning a month-on-month loss into a profit, deducting net profit of 0.08 billion yuan. The year-on-year loss narrowed by 111 million yuan, and the month-on-month loss narrowed by 128 million yuan.
Investment highlights:
The downturn in the industry cycle puts pressure on the company's gross profit, and R&D expenses continue to grow. The decline in the company's revenue in 2023 was mainly due to factors such as the decline in the semiconductor cycle and customer inventory removal behavior, which led to weak demand in the terminal market; on the gross margin side, the gross margin declined in 2023, mainly due to changes in the supply and demand relationship during the industry's downturn. On the cost side of the period, in the downward cycle of the industry, the company continued to invest resources in various areas such as R&D investment, market development, supply chain system, quality management, and talent building, causing the company's sales expenses, management expenses, and R&D expenses to continue to rise in 2023. On the share payment side, the company implemented a restricted stock incentive plan after listing. It is estimated that the total amortized share payment fee for 2023 will be about 221 million yuan, an increase of 12.39% over the previous year.
Excluding the impact of share payment fees, the company achieved net profit of 15 million yuan and net profit attributable to mother of 101 million yuan in 2023.
The automotive semiconductor market is expected to continue to grow in the next few years, focusing on the company's long-term value. According to Mordorintelligence estimates, the global automotive semiconductor market is expected to grow from US$71.62 billion in 2023 to US$140.52 billion in 2028, with a CAGR of 14.43%. Among them, the Asia-Pacific region occupies the world's largest market and will also be the fastest growing market in the next few years. The company can provide a wealth of automotive semiconductor products and solutions. In the first half of 2023, the company's revenue in the automotive electronics sector reached 26.28%, an increase of about 3 percentage points over 2022. According to the company's equity incentive guidelines, the company's revenue assessment targets for 2024 and 2025 are not less than 2.3 billion yuan and 2.8 billion yuan, respectively. The company is expected to continue to make breakthroughs in the next few years with its product advantages in the ever-expanding automotive semiconductor market.
Profit forecasting and investment rating companies are leading domestic simulation manufacturers, leading domestic products such as isolation and sensors, and have strong competitiveness in pan-industrial, automotive and other fields. In the future, it is expected that the company's performance will continue to grow as market demand expands, the company's product expansion and iteration. According to the performance report guidelines, we have adjusted our 2023 profit forecast. The company's net profit for 2023-2025 is estimated to be -2.36/1.31/324 million yuan respectively, corresponding to 2023-2025 PS of 12/8/6 times, respectively. Considering that the pan-industrial, automotive and other sectors are expected to gradually recover in the future, maintain a “buy” rating.
Risks indicate that production capacity expansion falls short of expectations; risk of changes in technology routes; risk of downstream application expansion falling short of expectations; epitaxial mergers and acquisitions falling short of expectations; geopolitical risk; increased risk of market competition; risk of new product development falling short of expectations, etc.