Revenue in 2023 increased 37% year over year, and 4Q23 revenue hit a quarterly high. In 2023, the company achieved revenue of 1,780 billion yuan (YoY +36.87%), net profit attributable to mother of 261 million yuan (YoY +6.15%), net profit not attributable to mother of 255 million yuan (YoY +6.54%), and gross margin decreased by 0.7 pct to 42.3%. Among them, 4Q23 had revenue of 575 million yuan (YoY +125%, QoQ +5.3%), net profit of 81 million yuan (QoQ +2.0%), net profit of 75 million yuan (QoQ -4.9%), and gross margin of 42.53% (YoY +0.9pct, QoQ-0.6pct). In 2023, the company's R&D expenses increased 57% to 293 million yuan, and the R&D rate increased by 2.1 pct to 16.4%; by the end of 2023, the number of R&D personnel increased 32% to 378 people.
Revenue growth has been achieved across all product lines, with mobile device power management chips accounting for 78% of revenue. By product line, the company's mobile device power management chip revenue in 2023 was 1,381 billion yuan (YoY +38.5%), accounting for 78%, and gross margin increased by 0.6 pct to 43.33%; general power management chip revenue of 205 million yuan (YoY +2.1%), accounting for 11%, gross margin decreased by 4.9pct to 43.95%; adapter power management chip revenue was 164 million yuan (YoY +88.5%), accounting for 9%, gross margin decreased by 0.6 pct to 30.9%; automotive electronic chip revenue 30.64 million yuan (YoY +89.0%), accounting for 2%, gross margin fell 6.55pct to 45.7%.
Smartphone power management chips cover the entire link, increasing the value of stand-alone devices. The company has achieved full coverage of wired charging, wireless charging, screen driver chips, and lithium battery protection chips in smartphones. Through the use of wired charging chips, the company has reached deep cooperative relationships with mainstream domestic mobile phone manufacturers, actively promoted the introduction of other product lines in the mobile phone field, and increased the value of stand-alone devices in mobile phones.
We are actively expanding the non-consumer electronics sector, and automotive electronic chips are progressing smoothly. The company attaches great importance to the automotive electronics business, and is developing multiple projects at the same time, moving from in-vehicle wireless wired charging to leading automotive manufacturers, continuously expanding the layout of new categories, and carrying out product layout planning in the fields of automotive instruments, smart cockpits, ADAS and BMS. In 2023, the company's USB and wireless charging solutions achieved large-scale mass production on the client; new products such as high-performance DC-DC power chips, HSD chips, and e-Fuse chips achieved large-scale sample delivery on the client, and some customers have already entered the targeted design stage of the project. In addition, the company plans to achieve an end-to-end product layout in the industrial field and achieve certain results in the fields of energy storage, drones, power tools, communications, etc., and is expected to be further introduced into industrial power supplies and AI Power in the future.
Investment advice: The company continues to expand its product line and application areas, and maintain the “purchase” rating. We expect the company's net profit to be 3.55/4.67/577 million yuan in 2024-2026 (in line with the previous forecast), with a year-on-year growth rate of +36/+31/ +24%. The PE corresponding to the stock price on March 20, 2024 is 41/32/26x, respectively. The company continues to expand its product line and application areas to maintain a “buy” rating.
Risk warning: New product development falls short of expectations; customer verification falls short of expectations; demand falls short of expectations.