Short-term pressure on the 2023 results. 2023Q4 revenue recovered month-on-month, maintaining the “buy” rating. In 2023, the company achieved revenue of 1,094 million yuan, or -38.68%; net profit to mother of -0.35 billion yuan, year-on-year -302 million yuan; deducted non-net profit - 113 million yuan, -300 million yuan; gross profit margin of 51.79%, -6.82 pcts year on year. It was calculated that 2023Q4 achieved revenue of 280 million yuan in a single quarter, -10.93% YoY, +39.34%; net profit to mother -51 million yuan, YoY -0.41 million yuan, -53 million yuan; net profit excluding non-return to mother -63 million yuan, YoY -34 million yuan, -44 million yuan month-on-month; gross profit margin of 46.61%, YoY -12.48pcts, and -3.41pcts month-on-month. Affected by the decline in industry sentiment, we lowered the company's 2024-2025 profit forecast to 176/320 million yuan (2.79 billion yuan), added 491 million yuan to the 2026 profit forecast, corresponding EPS of 1.33/2.42/3.70 yuan, and the PE corresponding to the current stock price is 77.5/42.5/27.7 times. As the industry cycle picks up and the competitiveness of the company's products continues to strengthen, the company's performance is expected to gradually pick up. We are optimistic about the company's long-term development and maintain a “buy” rating.

Digital and analog products go hand in hand and firmly establish a platform-based development strategy

In terms of signal chains, the company's product types and models continue to be enriched, and superior products continue to be iterated. Multiple high-quality products such as isolated sampling chips for servo and inverter control systems were launched in 2023, which are expected to accelerate; in terms of power management, the company's automotive grade power supply product reserves continued to be consolidated in 2023, various DCDC switching power supply products and PMIC products were mass-produced, and the product matrix continued to be enriched; in terms of embedded processors, the two main product lines of the TPS32 mixed signal microcontroller family, a total of 26 products were mass-produced and released. Various application fields such as smart door locks, smart homes, smart buildings, and industrial HMI have plenty of momentum for future growth.

The automotive and other terminal markets continue to expand, and the global layout of R&D and sales continues to improve market aspects. The company actively expands the automotive, industrial control, communications, and new energy markets, and has achieved impressive results.

In 2023, the company launched a series of groundbreaking automotive-grade products, including leading domestic automotive-grade PMIC chips to meet the stable, efficient and flexible power management needs of automotive smart cockpits, ADAS and other systems, which are expected to drive performance growth in the future; in terms of R&D and sales, the company will continue to launch a global layout of R&D and sales, and will establish new sales support centers in the US, Japan, South Korea and Germany within 2023 to facilitate quick response to overseas customer needs and provide high-quality localization support. Market influence and coverage continue to expand.

Risk warning: downstream demand falls short of expectations; customer introduction falls short of expectations; technology research and development falls short of expectations.