Key points of investment
Q4 Gross margin exceeded expectations, and profitability continued to improve. The company achieved revenue of 3.663 billion yuan in 2023, +35.39% year over year; net profit to mother was 911 million yuan, +11.36% year over year; gross margin for the whole year was 37.51%, or -2.79% year over year. Looking at a single quarter, Q4 revenue was 1,044 million yuan, +12.14% month-on-month; net profit to mother was 255 million yuan, +10.53% month-on-month, with a gross profit margin of 40.47%, or +3.88% month-on-month.
Downstream applications are flourishing, supporting more than 2 million new energy vehicles throughout the year. The downstream of the company is mainly divided into three categories. The new energy industry achieved revenue of 2.56 billion yuan, +48.09%. Among them, the company produced a continuous volume of vehicle-grade IGBT modules used in main motor controllers, supporting more than 2 million sets of NEV main motor controllers; the industrial control and power industry achieved revenue of 1,279 million yuan, +15.64% year over year; inverter white appliances and other industries achieved revenue of 203 million yuan, +69.48% year over year.
Overseas markets are progressing smoothly, and a number of new projects have been targeted. In 2023, the subsidiary Star Europe achieved revenue of 311 million yuan, +226.66% year on year; Starr's export business outside of Europe achieved revenue of 77 million yuan, +70.88% year over year. Up to now, the company has added a number of IGBT/SiCMOSFET main motor controller projects to gradually expand in overseas NEV markets.
Benefiting from the 800V high voltage trend, SiC MOSFET high-volume loading applications. As the 800V high-voltage platform model gradually enters the mass production stage, the company has added several targets for 800V system main drive projects using automotive-grade SiC MOSFET modules. Sales of SiC MOSFET modules will continue to grow from 2024-2030, contributing to revenue.
Investment advice:
We expect the company's net profit from 2024-2026 to be 11.4/14.4/1.77 billion yuan, covered for the first time, and given a “buy” rating.
Risk warning:
The risk of fluctuations in the NEV market; the competitive landscape of the industry intensifies risks; product promotion falls short of expectations.