2023Q4 revenue grew steadily, with significant month-on-month recovery, maintaining the “buy” rating. In 2023, the company achieved revenue of 2.06 billion yuan, +15.51% year over year; net profit to mother of 219 million yuan, -39.04% year on year; net profit of 204 million yuan, year-on-year, -31.98%; gross profit ratio of 34.13%, -6.28 pcts; 2023Q4 achieved revenue of 680 million yuan in a single quarter, +29.4% year on month; net profit to mother of 77 million yuan, year-on-year +16.14 %, +64.84% month-on-month; net profit without return to mother was 90 million yuan, +53.75% YoY, +144.15% month-on-month; gross profit margin 33.23%, -0.67pcts yoy, +0.37pcts month-on-month. Affected by the decline in industry sentiment, we revised the company's net profit forecast for 2024-2025 to 335/502 million yuan (436/697 million yuan), adding an additional 2026 profit forecast of 707 million yuan, corresponding EPS of 0.48/0.68/0.96 yuan, and the PE corresponding to the current stock price is 31.3/22.2/15.8 times. As the company's product structure continues to be optimized, performance is expected to gradually pick up. We are optimistic about the company's long-term development and maintain a “buy” rating.
The business situation is gradually improving, and increasing research and development shows confidence
After years of business accumulation, the company's product quality and stability have been significantly improved, and has been recognized by many first-tier brands around the world. 2023Q4, as product prices in the industry gradually stabilized, the company's single-quarter performance increased markedly, gross margin was repaired month-on-month, and the operating situation improved steadily; in terms of R&D investment, the company's R&D expenses in 2023 reached about 257 million yuan, +20.78% of the revenue ratio. The company bucked the trend and increased R&D investment and planned to maintain a high proportion of R&D investment in the future. The target is above 20%, which shows confidence in development, and the product strength is expected to gradually increase.
The company is actively expanding various production lines and has sufficient momentum for future growth
In terms of the Nantong project, the “High-end Power Semiconductor Device Industrialization Project” has produced 80,000 pieces/month. It is currently in the production capacity climbing stage. The product yield remains above 95%, which is expected to promote the development of high-end power semiconductors, ease the problem of tight MOSFET production capacity, and improve the strategic layout of the “power semiconductor device IDM” supply chain; in terms of vehicle level sealing and testing, the power semiconductor vehicle-grade sealing and testing project can produce 1900kk vehicle-grade DFN series products per year after construction is completed, forming a sales scale of 2 billion yuan. By the end of 2023, the company had invested more than 820 million yuan in the project. Currently, the plant has been capped, which is expected to become an important driving force for the company's revenue growth.
Risk warning: downstream demand falls short of expectations; customer introduction falls short of expectations; technology research and development falls short of expectations.