2023 results are in line with expectations, and the degree of fulfillment is high

The company released its 2023 annual report, achieving revenue of 317 million yuan, an increase of 39.77% over the previous year. Among them, MEMS gyroscopes and inertial sensor modules grew rapidly, increasing 42.37% and 128.59% respectively. Net profit attributable to shareholders of listed companies was 165 million yuan, an increase of 41.48% year on year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 143 million yuan, an increase of 33.50% year on year.

Continue to increase R&D investment and broaden the downstream application of the company's products

The company's R&D expenses in 2023 were 80.188 million yuan, an increase of 43.85% over the same period in 2022, accounting for 25.29% of revenue. The company attaches importance to R&D investment. As a chip design company, it has formed an independent patent system and a closed loop of technology in the field of MEMS inertial sensors. The company is mainly engaged in high-performance inertial sensors. The downstream involves intelligent manufacturing fields such as high-precision autonomous driving, robots, and drones. In the future, with continuous breakthroughs in technology, the company is expected to continue to expand more downstream application fields.

The company uses a Fabless business model. Under the Fabless business model, which is asset-light and efficient, product design is the core part of the company. Currently, the company has built a complete division of labor and cooperation model with high operating efficiency. The company is not directly engaged in chip production and processing. Currently, the main suppliers are Anhui North Microelectronics Research Institute Group Co., Ltd., ERA, and Shanghai Huaxe Electronic Technology Co., Ltd. The company delivered the completed chip design to the foundry for wafer processing, then packaged through the packaging factory, and then carried out product testing and calibration, reducing equipment and fixed costs and high operating efficiency.

Investment advice

We are optimistic about the long-term development of the company. The volume of the civilian market is expected to support the company's high revenue growth in the next few years. The revised profit forecast is: 2024-2026 will be 4.72/6.84/968 million yuan; the net profit forecast for 2024-2026 will be 237/3.26/402 million yuan, respectively; and the EPS for 2024-2026 will be 0.59/0.82/1.01 yuan. The PE corresponding to the company's current stock price is 59/43/35 times, maintaining a “buy” investment rating.

Risk warning

1) Breakthroughs in technology research and development fall short of expectations; 2) downstream demand falls short of expectations; 3) loss of core technical personnel; 4) large fluctuations in raw material costs affect gross profit margin; 5) Market competition increases the risk of affecting gross margin.