Benefiting from the release of new machines from downstream customers and the recovery in demand, the company achieved rapid growth in 2023 performance.
The company expects to achieve revenue of 887 million yuan in 2023, +15.60% year over year; net profit to mother of 200 million yuan, +36.87% year over year. Looking at a single quarter, 2023Q4 achieved revenue of 252 million yuan, +65.34% year-on-month, and -3.68% month-on-month; realized net profit to mother of 81 million yuan, reversing losses year-on-year, and +61.91% month-on-month.
Profitability is steadily recovering, and the share of high-margin products continues to rise. The company expects the net profit margin to be 22.52% in 2023, +3.50pct year on year; the 2023Q4 net profit margin is 32.21%, +38.03pct year on year, +13.05 pct month on month. The net profit margin of 2023Q4 increased sharply in a single quarter, mainly due to the drastic improvement in the company's product structure in the fourth quarter and the increase in the share of high-margin products. Looking ahead to 2024, the company's profitability is expected to remain stable with the smooth mass production of new models of the company's products, the launch of new products with high value and high gross margin, and the continuous upgrading of old products.
Consumer electronics account for a relatively high proportion, and automobiles and industries are expanding further. According to the company's disclosure in the investor relations activity record sheet, in the company's revenue structure, downstream consumer products account for about 60% to 70%, and electronic detonators account for nearly 15%. The rest are automobiles and industrial products, respectively. Based on the company's dominant position in consumer electronics such as mobile phones and wearable devices, the company is actively expanding market fields such as industrial control, medical electronics, automotive electronics, and network communications.
2023Q4 global smartphone shipments have recovered year over year and are expected to continue growing in 2024. Global smartphone shipments in 2023 were 1.14 billion units, -4.0% YoY, according to Canalys data. Among them, 2023Q4 shipped 320 million smartphones globally, +8.0% year-on-year, ending seven consecutive quarters of decline. In terms of market structure, 2023Q4 Huawei made a strong return, with shipments in mainland China +47% year-on-year, and a market share of 14%, ranking fourth. According to Canalys, the global smartphone market will expand 4% in 2024.
The subsidiary SEMIKENT is listed on the new 3rd board, and the digital detonator business is expected to usher in new development. Semikentuo, the holding subsidiary of the company, was officially listed on the New Third Board on January 22, 2024. It specializes in R&D, design and sales of electronic control modules, encoders and detonation controllers for the civilian explosion industry. SEMIKENT's listing on the new third board will help it expand its financing channels and enhance its market competitiveness.
Profit forecast: We expect that the company's net profit for 2023/2024/2025 will be 200/2.81/379 million yuan, respectively, corresponding to the February 28 PE share price 31/22/16 times, respectively, to maintain a “buy” rating.
Risk warning: New product development falls short of expectations, customer expansion falls short of expectations, and industry competition intensifies.