The company's gross margin declined year-on-year due to rising raw material prices and falling prices for some of the company's products. The company announced its 2023 performance forecast. The company's revenue in 2023 was 20.063 billion yuan (YoY -3.94%); net profit to mother was 1,365 billion yuan (YoY -34.13%). The company's comprehensive gross margin fell by 1.84% in 2023, mainly due to rising raw material prices and falling prices for some products. In order to promote product innovation and accelerate market development and brand promotion, the company's R&D expenses and sales expenses increased year-on-year.

Revenue from household appliances, computing equipment and electronic power businesses increased year-on-year. Parts business: Due to the decline in global TV shipments, the LCD main control board business revenue decreased by 12.37% year on year. Household appliances business: Thanks to the active development of domestic and foreign markets, revenue increased 62.48% year over year. Education business: Affected by factors such as industry price competition, revenue fell 8.77% year on year, and revenue from software and hardware products such as educational PCs, video recording and broadcasting, and Sivo Rubik's Cube digital docks grew rapidly. Enterprise service business: Revenue increased 2.13% year over year, driven by revenue growth in digital signage, audio and video products. Overseas business: Thanks to the recovery of overseas markets, the company actively expanded brand customers, increased shipments from major customers, continued promotion of overseas private brand business, and overseas business revenue grew in the second half of the year. Overseas business revenue for the full year of 2023 fell 1.69% year over year. Emerging businesses: LED business revenue decreased 4.52% year over year, computing equipment business revenue increased 34.86% year over year, and power electronics business revenue increased 28.99% year over year.

The company has the largest market share of education and conference tablet brands, and the AI model provides new added value to the product. According to Lotu Technology, in 2023, the company brand Sivo had the largest market share in the global interactive tablet education application industry, and the company brand MAXHUB had the highest market share in the global interactive tablet conference and other commercial markets. The company's education brand Sivo launched the seventh-generation interactive smart tablet in October 2023. The tablet incorporates a large AI model to better assist teaching. As of the first half of 2023, the company's brand Sivo products have covered 2.6 million classrooms and 7 million teachers. High-quality industry data is the company's core competitiveness in AI model training. In October 2023, MAXHUB, a brand under the company, officially announced that it will be the first to be installed in various products such as conference tablets and smart office books, and will provide functions such as voice control, real-time transcription of speeches, and intelligent refinement of meeting minutes to improve user collaboration efficiency. The company combines AI models with education and conference scenarios, which will provide new added value to the company's products in the future.

Investment proposal: According to the company's performance forecast, due to the decline in global TV shipments and industry price competition, the company's net profit for 2023/2024/2025 was lowered to 13.65/18.83/2.171 billion yuan (previous value:

(24.08/28.54/3.336 billion yuan), with year-on-year growth rates of -34.1%/38.0%/15.3%, respectively, corresponding to PE of 20.5/14.9/12.9 times. We are optimistic about the added value of products brought by AI models to empower education and conference scenarios, and are optimistic about the company's innovative business blossoming one after another, the revenue growth brought about by overseas market development and the continued promotion of its own brands, and maintain a “buy” rating.

Risk warning: New business development falls short of expectations; demand falls short of expectations; industry competition intensifies.