23Q4 revenue of US$1,678 million was slightly higher than the guideline, with a gross profit margin of 16.4%, in line with expectations.
Under China's accounting standards, revenue for 23 years was 45.250 billion yuan, down 8.61% year on year, net profit to mother was 4.823 billion yuan, down 60.25% year on year; 23Q4 single quarter revenue was 12.152 billion yuan, up 3.16% month on month, and net profit to mother was 1,148 billion yuan, up 69.45% month on month. Under international accounting standards, 23Q4's revenue for the single quarter was US$1,678 billion, up 3.53% month-on-month (up 1% to 3% from the original guide), slightly higher than the guideline. The gross profit margin was 16.4% (16% to 18% in the original guide), down 3.4 pcts month-on-month, in line with expectations.
23Q4 mobile phone sector revenue was +23% month-on-month, and image sensors and display driver chips performed well.
Looking at downstream applications, the smartphone sector's revenue in the 23Q4 single quarter was 471 million US dollars, up 23.1% month-on-month, mainly benefiting from CIS and ISP revenue growth of more than 60% month-on-month, and DDIC and TDDI revenue growth of 30% month-on-month. The computer and tablet sector's revenue was US$477 million, up 10.7% from the previous month, mainly benefiting from the large number of urgent orders for new products required by computers such as WiFi, LCD Drivers, and I/O.
Product mix changes compounded commodity price adjustments, and 23Q4 wafer ASP fell 3% month-on-month.
23Q4 wafer production capacity was 805,500 wafers per month (about 8 inches), up 1.2% month-on-month; wafer shipments increased 9.0% month-on-month, with a capacity utilization rate of 76.8%; wafer ASP was about 2,094 US dollars/piece (about 12 inches), down 3.1% month-on-month.
Guideline 24Q1 median revenue increased 1% month-on-month, and median gross margin decreased 6.4pct month-on-month.
The company guided 24Q1 revenue growth of 0% to 2% month-on-month, with median revenue of about US$1,695 billion, up 15.9% year-on-year and 1.0% month-on-month; gross margin range of 9% to 11%, with a median decrease of 6.4 pcts month-on-month, mainly affected by changes in the product portfolio and depreciation of SMIC Beijing.
Focus on the steady recovery in demand for new mobile phones and computer products, leading to a single digit year-on-year revenue growth in 2024.
The company's growth in 24 years mainly focused on a steady recovery in demand for new mobile phone and computer products. Currently, we have seen demand for urgent orders such as power, I/O, and WiFi, but it remains to be seen whether express orders for mobile phones and computers will continue. The company guided a single-digit year-on-year increase in revenue in '24, with capital expenditure roughly flat year-on-year (US$7.466 billion in '23).
Semiconductors are in Double U's second U. Customers are in short supply of new products, and old product inventories are still high.
Dr. Zhao Haijun of SMIC pointed out that the semiconductor industry is in the second U of Double U, customer inventories are gradually improving, and mobile phones and the Internet continue to pick up. Focusing on the Chinese market, customers' stocks of old products are still high, but new products, especially next-generation products related to mobile phones, smart homes, IoT, and PCs, are in short supply.
A leading domestic wafer manufacturer, leading mature process technology, and maintaining a “buy” rating.
As a leading domestic wafer manufacturing enterprise, the company is leading in mature process technology. The company's net profit for 24-26 is estimated to be 47.84/51.89/5.809 billion yuan respectively, corresponding to PE 73.1/67.4/60.2 times in 24/25/26, respectively, maintaining a “buy” rating.
Risk warning: macroeconomic risk; industry competition risk; supply chain risk; technology iteration risk, etc.