Incidents:
Star Semiconductor released its 2023 annual report, achieving operating income of 3,663 billion yuan, an increase of 35.39%; net profit to mother of 911 million yuan, an increase of 11.36% year on year; net profit after deducting non-return to mother of 886 million yuan, an increase of 16.25% year on year.
Comment:
The new energy sector led growth, and the increase in module share led to an improvement in gross margin. In 2023, the company's new energy revenue was 2.156 billion yuan, accounting for 59%, up 48.09% year on year; industrial control and power supply revenue was 1,279 million yuan, accounting for 35%, up 15.64% year on year; inverter white goods and other operating income was 203 million yuan, accounting for 6%, up 69.48% year on year. In the fourth quarter of 2023, the company achieved operating income of 1,044 billion yuan, up 25.62% year on year and 12.20% month on month; net profit to mother of 255 million yuan, up 10.92% year on year and 10.53% month on month; gross profit margin of 40.47%, up 3.88 pcts month on month, mainly benefiting from the increase in module revenue share.
Automotive-grade modules were quickly released, and a joint venture was established with Changan Deep Blue. Star Semiconductor is the leading IGBT module in China. In 2023, 750V automotive-grade IGBT modules were loaded in large quantities, and 1200V automotive-grade IGBT modules were newly designated as main drive projects for several 800V system models. In 2023, the company and Changan Deep Blue Automobile jointly established Chongqing Anda Semiconductor Co., Ltd. to develop and produce high-performance, high-reliability automotive-grade IGBT modules and automotive-grade SiC MOSFET modules. It is expected that plant construction will be completed and production will begin in 2024.
Automotive-grade SiC modules are shipped quickly, and SiC MOSFET chips are loaded in batches. The company continues to deepen the layout of SiC and automotive power devices. The company's vehicle-grade SiCMOSEET modules used in new energy vehicle main drives have been loaded and applied in large quantities. At the same time, several 800V system main motor controller projects using automotive-grade SiCMOSFET modules have been added to ensure the continued growth of vehicle-grade SiC MOSFET modules for main drives. At present, the company's own automotive-grade SiC MOSFET chips have been verified by many customers and batch shipments have begun.
Accelerate the development of overseas markets, and there is plenty of room for growth. In 2023, the company's overseas business achieved rapid development. The subsidiary Star Europe achieved operating revenue of 311 million yuan, an increase of 226.66% over the previous year, and maintained more than doubling growth for two consecutive years; Star's export business outside of Europe achieved operating income of 77 million yuan, an increase of 70.88% over the previous year. In 2023, the company began mass delivery of automotive-grade IGBT modules at Tier 1, a European first-tier brand, and also added a number of IGBT/SiC MOSFET main motor controller projects. Continued breakthroughs in overseas markets brought broad room for growth.
Profit forecast and investment rating: We expect the company's net profit to be 11.42/13.99/17.16 billion yuan in 2024/2025/2026, respectively, corresponding PE of 23/19/15 times, covered for the first time, giving it a “buy” rating.
Risk warning: macroeconomic risks; downstream demand falls short of expectations; industry competition intensifies