occurrences
The company released its 2023 performance report. It is expected to achieve annual revenue of 3,536 billion yuan, a decrease of 0.07% year on year; net profit to mother of 725 million yuan, a decrease of 32.69% year on year; Q4 revenue of 798 million yuan in a single quarter, a decrease of 15.24% month on month; and net profit to mother of 75 million yuan, a decrease of 62.84% month on month.
Key points of investment
Due to the impact of the inventory removal cycle, the company's performance is under pressure in the short term. The semiconductor industry cycle declined in 2023, due to factors such as oversupply and high inventory levels. The company's revenue for some products used in the consumer electronics, power electronics and other industries declined. It is expected to achieve annual revenue of 3,536 billion yuan, a decrease of 0.07% year on year; net profit to mother was 725 million yuan, a decrease of 32.69% year on year. Affected by the prices of some product lines, the annual comprehensive gross profit margin was 61.29%, down 3.38% year on year; Q4 single quarter revenue was 798 million yuan, a decrease of 15.24% month on month, and net profit to mother of 0.75 million yuan. The decrease was 62.84%, the gross profit margin was 50.01%, and the month-on-month decrease was 9.75%.
Continue to increase investment in R&D, and focus on technology iteration and new product development. The company continues to increase investment in R&D, continuously iterate technology and develop new products, enrich the product range to meet more application fields, and strengthen product research and development based on diversified supplier processes. The estimated R&D cost in 2023 is about 1,011 billion yuan, an increase of 37.42% over the previous year. Benefiting from advanced and reliable technology, continuous expansion of application fields and steady growth in demand from major customers, the revenue of FPGAs and some non-volatile memory products used in high-reliability scenarios has maintained steady growth.
FPGAs continue to be deployed, and applications in high-reliability scenarios are growing steadily. Currently, the company's three series of products, 10 million gate FPGA chips, and embedded programmable device chips (PSoC), are progressing smoothly in the high-reliability field. In the first three quarters of 2023, FPGA and other chip revenue reached 9.1 billion yuan, an increase of 51.67% over the previous year. The company is promoting next-generation FPGA platform development and industrialization projects, using a 1xnm process and Chiplet package to promote the development of high-end FPGAs in the direction of high capacity and high performance to meet the needs of data centers and other application fields. In addition to existing high-reliability application areas, the company is also actively promoting exploration into low-power and cost-sensitive markets, such as medical imaging, machine vision, professional monitors, automotive millimeter/lidar, industrial Internet of Things, and edge markets to prepare for the subsequent recovery in downstream demand.
Markets such as MCU and storage are gradually picking up, and channel inventory levels have returned to normal. Looking at the MCU business, due to market demand and high channel inventory, etc., the company's smart meter MCU faced a major impact in the first three quarters. The bidding situation improved in the fourth quarter, and MCU products were successfully introduced in the fields of automotive electronics and smart appliances. Looking at the storage business, the inventory levels of end customers and channels for consumer-grade storage products were low at the end of the year, and there was a certain improvement in price compared to previous quarters.
Investment advice:
We expect the company's 2023-2025 net profit of 7.2/8.7/1.14 billion yuan, maintaining a “buy” rating.