Revenue for the full year of 2023 increased 16% year over year, and 4Q23 revenue increased 95% year over year. In 2023, the company had revenue of 13.447 billion yuan (YoY +16.0%), net profit to mother of 1,282 million yuan (YoY -15.4%), and gross profit margin of 17.83% (YoY -3.3pct). Among them, 4Q23 had revenue of 4.885 billion yuan (YoY +95.0%, QoQ +36.1%), net profit to mother of 418 million yuan (YoY +13.2%, QoQ +30.4%), and gross profit margin of 18.23% (YoY 8.89pct, QoQ +2.14pct). Looking at the revenue structure, smart TVs, intelligent interactive display products, innovative display products, component sales, and design and processing businesses account for 54%/29%/7%/3% respectively.
Smart TV shipments increased 37% year over year, which is an important driving force for the company's performance growth. In 2023, the company's smart TV business generated 7.290 billion yuan (YoY +32.0%) and shipped 7.314 million units (YoY +37.3%).
The company has been deeply involved in the smart TV industry for many years and is actively exploring the TV market through various business models. In 2023, the sales volume of the company's smart TV business of all sizes showed a growing trend. According to DiXian Consulting, 1Q24's TV ODM shipments were about 1.6 million units, an increase of 16% year on year, and continued to maintain the year-on-year growth trend.
E-sports display shipments grew rapidly, and sales of innovative display products doubled. The company's e-sports display business grew rapidly in 2023, with 1.4299 million units shipped in 2023 (YoY +241.39%), and annual sales increased 169.97% year-on-year. At the same time, the company is exploring the market through its own brands KTC, Haoli, and FPD. Innovative display products have now formed nearly 20 product lines, with sales of innovative display products of 960 million yuan (YoY +128.92%) in 2023.
Sales of smart interactive tablets declined year over year and are expected to recover in 2024. In 2023, the company's smart interactive display product revenue was 3.8 billion yuan (YoY -9.0%). Among them, the smart interactive tablet business was affected by the overseas macro environment and inventory removal from overseas customers, sales fell 32.6% year-on-year. According to DiXian Consulting, global shipments of smart interactive tablets were 2.85 million units in 2023, down 4.6% year on year. Shipments are expected to be 2.9 million units in 2024, an increase of 2% year on year. In 2024, the company's smart interactive tablet business is expected to recover along with the industry's growth rate.
Issuing equity incentives to demonstrate confidence in future development. The company announced an equity incentive plan for 2024. The target revenue values for 2024-2026 were RMB 151/174/18.8 billion, respectively, and the growth rates of 12.3%/29.4%/39.8% compared to the 2023 revenue; the trigger values were RMB 144/163/17.5 billion, respectively, compared to the 2023 revenue growth rate of 7.1%/21.2%/30.1%, respectively.
Investment advice: We are optimistic that the company will expand its customers to bring an increase in TV ODM shipments, maintain a high growth rate in e-sports displays and innovative display products, the recovery of the smart interactive tablet market, and future performance growth brought about by the global layout. The company's net profit for 2024-2026 is estimated to be 1,480/17.86/19.55 billion yuan (the previous value was 1,369/1,568 billion yuan in 2024-2025), with a year-on-year growth rate of 15.4%/20.7%/9.5%, corresponding to PE of 12.3/10.2/9.3 times, maintaining a “buy” rating.
Risk warning: Prices of upstream raw materials fluctuate, downstream demand falls short of expectations, and industry competition intensifies.