Event: Company Announces 2023 Annual Report.
Benefiting from a recovery in demand and new customer breakthroughs in the company's new products, the 2023 performance was outstanding. In 2023, the company achieved revenue of 520 million yuan, +25.41% year-on-year; realized net profit of 65 million yuan, +21.04% year-on-year. Among them, Bluetooth audio SoC chips achieved revenue of 386 million yuan, +42.58% year over year; portable audio and video SoC chips achieved revenue of 99 million yuan, -11.74% year over year; and end-side AI processor chips achieved revenue of 34 million yuan, +30.76% year over year.
The share of high-margin product shipments increased, and the company's gross margin increased year-on-year in 2023. In 2023, the company achieved gross profit margin of 43.73%, +4.40pct year on year; net profit margin was 12.51%, -0.45pct year on year. Among them, the gross margin of Bluetooth audio SoC chips was 42.66%, +6.07pct; the gross margin of portable audio and video SoC chips was 50.49%, +2.67pct year on year; and the gross margin of end-side AI processor chips was 35.53%, +5.77pct year over year.
Watch chips are rapidly launching in domestic and foreign markets, driving the company's revenue growth in 2023. In 2023, the company's first-generation smartwatch chip ATS3085C/85L/85 was rapidly deployed in domestic and foreign markets due to its low power consumption, high frame rate, and high performance, and was used as the main control chip in various terminal watch models such as Xiaomi, Honor, Noise, Fire-Boltt, Titan, Realme, Nothing, Boat, etc., and the shipment volume of watch chips in 2023 reached a record high.
Bluetooth speaker chips have entered the international first-tier brands, and the market share is expected to continue to increase. In the field of Bluetooth speakers, the company has become a mainstream supplier of terminal brands in the industry. In particular, high-end Bluetooth speaker SoC has achieved breakthroughs in international first-tier brands. The company mainly serves first-tier and second-tier terminal brands at home and abroad, including many terminal brands such as Harman, SONY, Anke Innovation, and Razer. In 2024, the company will firmly implement the big customer strategy and continue to increase its market share.
The trend of wired to wireless video products is clear, and the company has accumulated deep wireless audio with low latency and high sound quality.
The company's low latency and high sound quality wireless audio products are mainly used in the three major scenarios of wireless home theater audio, wireless microphones, and radio sports headsets. These products are gradually becoming wireless. With years of accumulation, the company has entered the supply chain of Samsung, SONY, Vizio, Hisense, TCL, and Polk in the wireless home theater market; the wireless microphone market has entered the supply chains of DJI, RODE, Mamma, Fengdi, etc., and the radio sports headphone market has entered the supply chain of Siberia and Baseus.
Profit forecast: We expect the company's net profit to be 0.887/1.14/144 million yuan for 2024/2025/2026, respectively, corresponding to the share price PE on March 26, 40/31/24 times, respectively, to maintain a “buy” rating.
Risk warning: New product development falls short of expectations, customer expansion falls short of expectations, and industry competition intensifies.