Revenue grew steadily in 2023, Q4 performance recovered month-on-month, maintaining the “buy” rating. In 2023, the company achieved revenue of 9.34 billion yuan, +12.77%; net profit to mother -0.36 billion yuan, year-on-year -1,088 billion yuan; net profit after deducting non-net profit of 59 million yuan, -90.67%; gross profit margin 22.21%, year-on-year -7.23pcts; 2023Q4 achieved revenue of 2.44 billion yuan, +19.76% year-on-month; year-on-year net profit of 1.53 billion yuan, year-on-year 44.8%, +302 million yuan month-on-month; net profit after deducting non-attributable net profit of 125 million yuan, year-on-year -86 million yuan, month-on-month -147 million yuan; gross profit margin 18.92%, year-on-year -9.15 pcts, -2.95 pcts month-on-month. Affected by the downturn in the industry cycle, we lowered the company's 2024-2025 net profit forecast to RMB 339/599 million (up to RMB 88/11.33 billion) and added a 2026 forecast of RMB 940 million, corresponding EPS of 0.20/0.36/0.56 yuan, and the PE corresponding to the current stock price is 93.4/52.9/33.7 times. We are optimistic about the company's continued development in the field of new energy and maintain a “buy” rating.

Discrete devices: Product upgrades continue to accelerate the deployment of electric vehicles and new energy markets. In 2023, the company's discrete device business revenue was 4.832 billion yuan, +8.18% over the same period last year, accounting for 51.74%. On the IGBT side, the company's revenue has reached 1.4 billion yuan, +140% year-on-year, and the growth rate is impressive. Among them, tram main motor drive modules based on V-generation IGBTs and FRD chips independently developed by the company have been delivered in batches to many domestic and foreign customers, such as BYD and Geely, and are expected to continue to be released in the future; in terms of SiC, the company is accelerating the construction of SiC SiC production lines. By the end of 2023, the company has formed a 6-inch SiC MOS chip production capacity of 6,000 pieces/month, and is expected to increase to 12,000 pieces/month by the end of 2024, with sufficient production capacity; in addition, the production capacity is sufficient; in addition, it is based on the second-generation SiC MOSFET independently developed by the company Electric vehicle main motor drive modules have been mass-produced and delivered in 2024Q1. It is estimated that the revenue of silicon carbide PIM modules used in automobile main drives will reach 1 billion yuan throughout the year, which is impressive.

Integrated circuits: Shipments increased markedly, and the downstream sector continued to broaden the company's business revenue of 3.129 billion yuan in 2023, +14.88% over the same period last year, accounting for 33.50%. In terms of IPM modules, the company's products have been widely used in inverter products for downstream home appliances and other customers. In 2023, mainstream domestic white electronics manufacturers used more than 100 million company products (+38% over the same period last year), and it is expected to maintain rapid growth in the future. In terms of MEMS sensors, the 2023Q4 six-axis inertial sensor has been supplied in batches to a domestic smartphone manufacturer, and is expected to expand in the future. In the future, the business will accelerate its expansion into fields such as white electricity, automobiles, etc., and shipments are expected to grow rapidly.

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