Hong Kong, March 28, 2024/US Communication/ -- On March 21, Sonic Technology (2018.HK) will hold a media conference for its 2023 results in Hong Kong.

For the full year 2023, Swisong Technology had a revenue of RMB204.2 billion, a gross margin of 16.9%, and a net profit of RMB7.4 billion. Of these, revenue for the second half of the year was RMB112.0 billion, gross profit was 19.2%, and net profit was RMB5.9 billion, an increase of 25.2% year-on-year.

At the meeting, CFO Kuo Dan said that demand in the mid-high-end smartphone market recovered first in the second half of last year. The results of Rysong Technology came to a close, and expected continued improvement in business performance in acoustics, optics, structural components, etc., in 2024. Overall revenue is expected to increase by 10~ 15% in 2024, and the combined gross profit level will also return to above 20%.

In addition, Rysong Technology's automotive business will also see significant progress. Kuo Dan revealed that the acquired PSS will start financial and accounting this year from the completion of the first handover in February and will generate revenue contributions of between $30 billion and $35 billion in the automotive business, achieving a net profit of around $2 billion. PSS covers the majority of high-end brands in Europe and America, leading the industry, whether in customer relations or product innovation. Once integrated, PSS will dominate the development of the entire automotive business. AAC itself will focus more on the investment and development of its own resources, such as algorithms, power, etc., and help with the acquisition of PSS Other products in the future will be introduced more quickly to the global layout of the automotive sector and the company's overall business.

projectedRevenue increased by 10~ 15% in 2024, combined gross margin of more than 20%

Guo Dan said that the global smartphone market shipment volume in 2024 is still cautious, but the trend is increasing in the mid-to-high-end phone market. “This for us will see better top-line growth, especially for our ASP, and there will also be better support for our margins.”

According to Guo Dan, the acoustics and electromagnetic transmission business is expected to benefit from the expansion of the field of acoustics and the rapid development of new areas such as spindle cooling, as well as the expansion of the company's new innovative products in the field of acoustics and the rapid development of new areas such as spindle cooling. The acoustics division is expected to have a gross margin level of 25~ 30% in 2024; the electromagnetic transmission and precision components segment, in the gross margin range of 20~ 25%.

In addition, Rysone's optical business will steadily improve in 2024. In terms of plastic lenses, the optical industry has returned to a relatively healthy competitive position, with shipments of high-end products from Rysong Technology 5P, 6P and above gradually increasing. In terms of WLG glass-plastic hybrid lenses, the production rate is steadily increasing, “Our WLG's cumulative shipments have approached 800 million units, of which 300 million are 1G6P, both optical performance and technical difficulty, and are comparable to the US 7P plastic lenses, which is also a demonstration of our level of technology.”

“Under the positive outlook for the different segments, the Group's top line overall revenue will increase by 10~ 15% in 2024, and the combined gross profit will also return to a relatively healthy level of more than 20%.” GUO DAN FURTHER STATED THAT THIS CONSOLIDATED PROFIT COMPARED TO A FEW YEARS AGO IS DUE TO A MORE DIVERSE LAYOUT OF DIFFERENT PRODUCT LINES AND A MORE STABLE PRODUCT PORTFOLIO, WHICH CAN BETTER SUPPORT THE COMPANY'S STABLE PERFORMANCE IN THE LONG TERM.

Precision structural component blocks are expected to continue to grow at a high rate for several years

The report shows that in 2023, Swisong Technology Metal Frame revenues grew 34.3% year-on-year, with double-digit increases in shipments and ASP, and continued to maintain market share in high-end machines and flagships of key customers. In the second half of 2023, volume shipments of pivot products began, with shipments approaching 70 million units throughout the year. In addition, revenue from cooling products grew by more than 100% year-over-year.

Guo Dan said that the company's precision structural components business has been in good shape for the past two years, with annual growth of more than $1 billion, including the high growth of the metal frame business. After acquiring Dongyang Kunshan Precision, the company entered the North American consumer notebook business, contributing to a relatively stable volume of business in both years.

In addition, the spindle for folding machines is also the new growth engine of Rysong technology. Guo Dan said that in 2023, Shuisong Technology had a revenue increase of more than US$3 billion. And revenue in terms of cooling achieved a twofold year-on-year increase in 2023, driven by increased demands on cooling performance thanks to improved mobile chip capabilities.

Guo Dan revealed that Rysong Technology is expected to continue to grow at a high pace in the spindle and cooling business this year, and that the entire precision manufacturing division will see broader performance gains in the future.

PSS Company to Contribute to 30-35 Billion Vehicle Business Revenue

SUISONIC TECHNOLOGY HAS BEEN ACTIVELY DEVELOPING ITS SECOND GROWTH CURVE IN RECENT YEARS AND WILL BEGIN TO ENTER THE AUTOMOTIVE SECTOR IN 2021.

In February of this year, Acoustic Technology completed the acquisition of an 80% stake in Premium Sound Solutions (PSS), a well-known global supplier of automotive acoustics products. Kuo Dan said that by combining PSS's rich product portfolio, global production layout and solid supply relationships with OEMs worldwide, Swisong Technology will provide innovative high-quality audio system solutions that will accelerate penetration of the global automotive industry.

“We expect PSS to contribute $30 billion to $35 billion in revenue this year, achieving a net profit of around $2 billion.” Guo Dan said.

As for the further layout of the automotive sector, the management of Rysone Technology said that the car business and the mobile business actually have a lot in common. The future of the company will not only dwell on acoustics, but also in optics or other aspects, and there will be a longer development layout.

In addition, in terms of AR/VR business, Rysong Technology XR acoustics solutions have been shipped to many global XR head enterprises, and the electrical-related business is also being systematically promoted with customers.

Free Cash Flow38.1 billion yuan, the highest level since the IPO

It is worth mentioning that as of December 31, 2023, the operating cash inflow of RMB 46.3 billion was RMB46.3 billion, up 6.0% year-on-year, reaching a near five-year high. Capital expenditure was RMB13.8 million, down 25.4% year-on-year; free cash flow was RMB38.1 billion, the highest level since listing. The cash on hand was RMB68.2 billion and the net balance ratio was 5.1%. The number of inventory turnover days decreased from 109 days to 80 days.

“We believe that a stable cash situation can better support the strategic layout of new business areas in the company's long line, which is also very helpful in supporting the acquisition of PSS companies.” Guo Dan revealed that the company's leverage ratio has not increased significantly after the acquisition, with half of the acquisitions supported by its own cash flow, and the overall financial situation is very stable.

Guo Dan emphasized that Ruisong Technology will continue to adhere to prudent financial management policies and strictly manage capital expenditures and operating expenses. A sound financial situation is critical to the sustainability of Rysone technology and lays a solid foundation for future innovation.