There are few high growth opportunities, benefiting from the increase in our own share and the trend of major customer optical upgrades, and we maintain the 2024 net profit forecast of 93 million US dollars; considering the impact of the company's capex investment in additional depreciation, we lowered the net profit forecast for 2025 from 186 million US dollars to 172 million US dollars, and added the 2026 net profit forecast of 232 million US dollars, corresponding to year-on-year growth rates of 101.5%/84.9%/34.6%, respectively. The current stock price corresponds to 2024-2026 21.0/11.4/8.5 times PE.
The company is scarce for rare high-growth opportunities. 2024H2 and future net profit is expected to increase significantly, benefiting from its new product introduction process and the optical upgrade trend of major customers. At the same time, the MR and lidar layout provides medium term growth and maintains a “buy” rating.
The profit for 2023 was basically in line with our expectations. Major customer business revenue fell short of expectations, and the company achieved net profit of US$46 million in 2023, which was basically in line with our expectations, mainly due to the company's bank interest income and the gross margin of the lidar business exceeding our expectations, but this was partly offset by the tablet business performance falling short of our expectations. Specifically: (1) 2023H2's revenue was 550 million US dollars, a 22% year-on-year decline lower than our previous expectations. The analysis was mainly due to the impact of the tablet business inventory adjustments of the company's major customers in 2023, and the company's tablet business revenue fell short of our expectations. (2) 2023H2's gross profit margin of 13.8% was basically stable month-on-month compared to 13.9% in 2023H1, higher than our previous expectations. The analysis was mainly due to improvements in lidar business profits.
(3) The company's bank interest income in 2023 contributed more than our expectations by $11 million.
2024H1 profits have rebounded steadily. After 2024H2 and the continued high growth trend clearly take into account the potential price pressure of customers and the negative impact of new depreciation on gross margin brought by Capex investment, we expect 2024H1 net profit to remain flat or increase slightly year-on-year. At the same time, as the company successfully introduces mobile phone rear camera module models from major customers, the net profit of 2024H2 and the future is expected to increase rapidly: (1) We expect 2024H1 net profit to remain flat or slightly increase year on year, mainly considering the end of the tablet business inventory adjustment for major customers and the company's share or There has been an improvement; (2) We expect the company to successfully climb the yield of major customer mobile phone rear camera modules one by one, corresponding to the 2024H2 introduction share and future share increase process, which may exceed our previous expectations; (3) We expect the optical upgrade trend for major overseas customers to accelerate.
Risk warning: The profit of major customer projects falls short of expectations, and MR volume falls short of expectations.