Benefiting from the company's diversified downstream layout, revenue in 2023 achieved positive year-on-year growth. In 2023, the company expects revenue of 636 million yuan, +4.40% year on year; net profit to mother of 50 million yuan, +0.55% year over year. Looking at a single quarter, 2023Q4 achieved revenue of 160 million yuan, -7.87% year-on-year, and +1.68% month-on-month; realized net profit to mother of 12 million yuan, -55.52% year-on-year, and +39.04% month-on-month.
Although demand from some customers declined due to the economic downturn, thanks to the company's diversified downstream layout and overseas customer business growth, the company achieved positive year-on-year revenue growth in 2023.
Product structure improvements combined with cost optimization have increased the company's gross margin. The company expects to achieve gross margin of about 43.50% in 2023, +2.23pct year-on-year. In an environment where overall demand for semiconductors is weak, the gross margins of some companies in the industry were under pressure in 2023. Through active product restructuring, sales of IoT products and audio products increased compared to the previous year. Combined with cost control optimization, gross margin achieved contrarian growth.
The company's R&D team continues to grow, and R&D investment continues to increase. In 2023, the company is expected to incur R&D expenses of about 173 million yuan, +25.13% year-on-year. In terms of operating efficiency, the company's inventory turnover efficiency has improved markedly. The inventory balance decreased by 37.76% year on year, and inventory control is good. The company continues to invest in the direction of low-power multi-mode wireless IoT, and continues to launch chip products, supporting protocol stacks, and reference applications that meet the latest standards such as low-power Bluetooth, Matter, and Zigbee.
There are a wide range of downstream applications, and the company has entered the supply chain of many well-known brands. The company has accumulated rich terminal customer resources around the world, and has formed stable cooperative relationships with many industry-leading mobile phone and peripherals, computer and peripherals, remote control, home lighting, etc. The products are widely used in Hanshuo, Xiaomi, Logitech, Oz, Graffiti Intelligence, Landvance, Renesas, Skyworth, Sharp, Panasonic, Nvidia, Harman and many other well-known mainstream terminal brands.
The company was one of the first members of the Starlight Alliance and actively invested in related product research and development. The company became a member of the first Starflash Alliance in 2020, and has also been closely tracking the progress of Starflash standards. It has always invested in relevant R&D, completed research and development of major related technologies, and is being integrated into the company's multi-mode system-level chips. The company is one of the first companies in the world to launch low-power multi-mode chips for the Internet of Things. The multi-mode chip architecture has a number of patents and private technologies independently developed by the company, which can add Starlight's functions to current multi-mode chips.
Profit forecast: We expect the company's net profit to be 0.5/0.87/122 million yuan for 2023/2024/2025, respectively, corresponding to the share price PE on March 21, 113/65/46 times, respectively. It was covered for the first time, giving it a “buy” rating.
Risk warning: New product development falls short of expectations, customer expansion falls short of expectations, and industry competition intensifies.