Incident: The company released a performance report. In 2023, the company achieved revenue of 1,311 million yuan, -21.51% year on year; net profit loss to mother 236 million yuan, -194.21% year on year; net profit loss after deducting non-return to mother of 322 million yuan, -290.19% year on year.
Downward demand in the industry is weak, and the company strives to practice internal skills, and investment continues to grow. The main reasons for the decline in the company's performance in 2023 are: 1) due to the decline in the macroeconomy and semiconductor cycle, customer inventory removal behavior, and changes in industry supply and demand; 2) the company's gross margin also declined; 2) the company focused on accumulating talent and technology in the downward cycle of the industry, and continued to invest resources, and R&D, sales and management expenses continued to rise; 3) The company implemented an equity incentive plan. The company is expected to amortize share payment expenses of 221 million yuan in 2023, +12.39% over the same period last year. Net profit from parent - RMB 15 million, net profit not attributable to mother - RMB 101 million
The main downstream sectors have seen signs of improvement, and the downstream economy can be expected to recover. Looking at 2023Q4 alone, the company achieved revenue of 310 million yuan, -21.31% YoY, +11.94% month-on-month; net profit to mother was 0.15 billion yuan, +72.50% YoY, +112.39%. Looking downstream, the traditional industry and automobile markets have seen clear signs of improvement in 2023Q3, and the company's revenue in related fields has achieved month-on-month growth; after a long period of downturn in the consumer electronics market, 2023H1 has seen signs of recovery, and 2023H2 has gradually resumed growth; downstream storage companies are optimistic about industrial demand expectations at the end of 2022 and the beginning of 2023, leading to inventory accumulation, and is still in a state of de-inventory. Taken together, the company's downstream demand has recovered steadily. Coupled with support from downstream supply chain enterprises and internal cost optimization, the company is expected to achieve both revenue and profitability improvements in the future.
New product development continues, and mergers and acquisitions build comprehensive strength. The company forwardly lays out product lines such as magnetic sensors, high-end isolation, and automotive power management. 12-channel automotive LED drivers and magnetic current sensors have all been shipped on a large scale; isolated half-bridge drivers, multi-channel half-bridge motor drives, and low-side switch products are gradually being sold; isolated drivers, LDO, and high-side switch products with functional safety are expected to gradually be introduced into customers to contribute revenue. The company's comprehensive product layout will help the company grasp the wave of automotive electrification+intelligence, robots, servers, etc., and lay a solid foundation for the company's long-term growth momentum. Furthermore, the company has sufficient cash on hand, actively pays attention to merger and acquisition integration opportunities, builds core capabilities around key applications such as automotive electronics and pan-energy, continuously broadens product categories, and gradually becomes a semiconductor company with the ability to provide chip-level solutions.
Investment advice: We expect the company's net profit to be -236/-1.01/227 million yuan in 2023/2024/2025, respectively, corresponding to the 2025 PE ratio of 69.44 times, maintaining the “increase” rating.
Risk warning: Industry demand falls short of expectations; new product development falls short of expectations; industry competition intensifies.