Performance summary: On March 23, 2024, the company released its 2023 annual report. The company achieved operating income of 580 million yuan, a year-on-year increase of 10.0%, and realized net profit to mother of 19.072 million yuan, a year-on-year decrease of 150.2%.
Performance is under pressure, and R&D investment continues unabated. 2023:1) Revenue side: The company achieved revenue of 580 million yuan, an increase of 10.0% year on year. Among them, AC-DC/drive IC/DC-DC achieved revenue of 2.9/28/0.1 billion yuan respectively, an increase of 0.8%/18.3%/610.5% year on year, respectively. 2) Profit side: The company achieved net profit of 19.072 million yuan, a year-on-year decrease of 150.2%; the company's gross margin/net margin was 23.6%/-6.3%, respectively, down 4.4 pp/11.8 pp year on year. 3) Cost side: The company's sales/management/ R&D expenses rates were 2.9%/6.4%/27.5%, respectively, up 0.4 pp/ 0.1 pp/ 5.6 pp year on year. The absolute value of the company's R&D expenses was 160 million yuan, up 38.2% year on year.
AC-DC's main business continues to grow in home appliances, and power supplies have core customer advantages; general LEDs are greatly affected by the macro environment, and the company's structural adjustments are expected to improve profits in this business segment. On the AC-DC side, the company continues to cultivate in the AC-DC chip direction, focusing on improving product performance and reliability. With the continuous launch of various products such as interleaved PFC and LLC, the company is actively promoting the localization process of high-power fast charging (up to 240W) and high-power power power supply (up to 3000W) applications. In terms of LED drivers, general LEDs are easily affected by the macro environment. In 2023, due to price pressure brought about by looser supply and demand, the company is expected to adhere to the strategy of actively reducing the share of materials with large losses and focusing on medium- and high-power and smart LEDs. This business segment is expected to increase gross margin and profit.
DC-DC and motor drives are expected to increase in volume, and BMS continues to advance. In terms of DC-DC, in 2023, the company's DC-DC chips were recognized by leading customers through vigorous promotion on the market side. Revenue increased 6-fold year-on-year, and cumulative shipments reached 53.83 million units throughout the year. Currently, they cover the 4.5-40V voltage range and 0.6-6A current range, and are expected to be released steadily throughout 2024. In terms of motor drives, the company has completed a new layout of the motor drive sector through the acquisition of Dongxin Micro Chengdu. Currently, a number of single-phase BLDC motor drive control chips have been applied in batches to cooling systems in the fields of CPU, GPU, PC, server, and lithium battery energy storage, which is expected to be launched rapidly in 2024. In terms of BMS, the company launched a high-side/low-side drive BMS AFE chip that can support BMS systems within 110V. It is actively developing and supporting daisy chain cascaded BMS AFE chips for 200-800V high-voltage applications, which are expected to be used in large-scale energy storage systems and new energy vehicles.
Profit forecasting and investment advice. It is estimated that in 2024-2026, the company's revenue will be 7.6/9.6/1.17 billion yuan, respectively, and net profit to mother will be 0.3/0.7/110 million yuan, respectively. Considering that the company's DC-DC and motor drive product lines will increase the company's revenue outside of the main AC-DC and LED drive business, and that the BMS product line with high competitive barriers is expected to start in 2025, we gave the company 36 times PE in 2025, corresponding to a target price of 34.20 yuan, to maintain a “buy” rating.
Risk warning: Risks such as increased competition for main products, customer expansion of new products falling short of expectations, and company management.