Financial Services Association, March 14 (Reporter Chen Mo) On the evening of the 13th, the 2023 financial report for the largest A-share Nvidia concept stock (601138.SH) was released. Under the wave of AI swept through, IFF's net profit for the year increased 4.8% year on year, and net profit after deducting non-net profit increased 9.8% year on year, all of which hit new highs since listing.

Financial reports show that IFF's revenue for the full year of 2023 was 476.34 billion yuan, down 6.94% year on year; net profit to mother was 21.04 billion yuan, up 4.8% year on year; after deducting non-net profit of 20.01 billion yuan, up 9.8% year on year; with AI support, the company's gross margin broke 8% for the first time, a record high since listing.

Looking at a single quarter, the company's revenue for the fourth quarter of last year was 147.52 billion yuan, down 2.2% from the same period last year, and net profit of 7.523 billion yuan, down 9.1% year on year. This situation may be related to the fact that the sales volume of the Apple iPhone 15 series is weaker than the 14 series. According to Counterpoint Research data, sales of the iPhone 15 series in 17 days after launch in China fell 4.5% compared to the same period of the iPhone 14. Combined with the decline in consumer electronics throughout 2023, the overall revenue of the company's communications and mobile network equipment business in 2023 fell 6.97%, down 5.81% year on year.

In terms of cloud computing business, the company's revenue in 2023 reached 194.308 billion yuan, accounting for more than 40% of revenue. Among them, AI server shipments, which have received much attention, have grown strongly, accounting for 30%, an increase of about 50% over the previous year, making it the biggest contributor to IFF's net profit growth. Driven by cloud service providers and AI server businesses, the gross margin of the cloud computing sector increased 1.12 percentage points from the previous year to 5.08%, but the overall revenue of the sector still declined by 8.54%.

Furthermore, the gross margin of the company's industrial Internet business reached an astonishing 49.81%, and total revenue fell 13.89%. As can be seen, the revenue of all segments of IFF declined, but due to the further decline in operating costs, the gross margin of all sectors increased.

It is worth mentioning that the company's stock experienced the biggest decline in two months prior to the release of the IFF financial report. Since February, with the impact of many favorable factors, such as the launch of Sora and Nvidia's bursting performance, IFF's stock price has advanced rapidly, and has risen by more than 70% since February. In early trading on March 13, IFF continued its upward trend. At one point, IFF's stock price rose more than 8%; after 2 p.m., IFF's stock price suddenly dived and closed down 1.8%.

The reporter asked IFF insiders about the reason for this stock price dive, but they did not give an accurate answer. There is a lot of speculation in the market about this incident, and many remarks such as “the H800 is not actually being sold” and “the H20 is slow to sell.” The reporter interviewed the person in charge of computing power at an AI company and learned that currently the H800 is still stocked on the market, and since the H20's actual computing power is close to 80% of the H800, sales are actually good, so it can be seen that most of the “small essays” are fictional.

Under these circumstances, IFF's stock price dive may be related to its performance falling short of expectations. After reviewing the three quarterly reports of various brokerage agencies, the CIFA reporter found that the market's annual net profit forecast for IFF was between 23 billion yuan and 25.4 billion yuan, and the final performance of 21 billion yuan was more than 10% lower than the forecast.