Incident: The company released its 2023 annual report, achieving full-year revenue of 5.933 billion yuan, and net profit of 361 million yuan, net profit to mother of 361 million yuan, +102.28% year-on-year, after deducting non-net profit of 163 million yuan, +9.53% year-on-year, gross profit margin of 15.06%, and year-on-year +2.76pct.

The super-fast performance report predicts a marked improvement in profitability: in the 23Q4 quarter, the company achieved revenue of 1,609 million yuan, +15.57%/-11.93% month-on-month, and realized net profit of 49 million yuan, +452.73% /month-on-month -80.40%, net non-net profit of 0.2 billion yuan, -300.57% /month-on-month -97.73%, gross profit margin of 16.69%, year-on-year +1.09pct/month-on-month -0.18pct. The large increase in net profit due to the full year was mainly due to the fact that there was more confirmation of investment income from non-recurring profit and loss (162 million yuan), and the net profit data from the previous report (336 million yuan) was mainly due to the final confirmation that investment income increased compared to the previous period. The company's gross margin performance in 2023Q3/4 was good, and a clear trend of improving profitability was confirmed. The 2024Q1 results forecast quarterly revenue of 1.12-13 billion yuan, +10.15%-20% year-on-year, and net profit to mother of 2600-28 million yuan, +263.60%-316.74% year-on-year, providing a good start to the year.

AI/automobile/XR three-wheel drive accumulates energy: AI speakers: Cooperation between the company and domestic and foreign manufacturers equipped with large-scale smart speakers continues. As AI models are gradually implemented on the end side, the company is expected to benefit from the industry wave with leading card slots. Automotive acoustics: The company has not only been designated by many leading domestic NEV customers for multiple models, but has also received orders from foreign automobile customers, and is expected to form an important performance contribution point in the future. XR: The company is an acoustic module supplier for leading VR companies at home and abroad, and has a stable supply of products for leading companies such as M customers and P customers. With Apple's entry, Meta's cheap products are expected to be launched, and the company's XR business is expected to benefit from renewed growth in the industry.

Investment advice: The company's performance exceeds expectations, the profit trend is improving, and AI/automobile/XR three-wheel drive is saving energy for future growth. We expect the company's 2024-2026 net profit to be 3.15/4.22/496 million yuan, EPS 0.55/0.74/0.87 yuan/share, corresponding PE 22.97/17.13/14.57 times, maintaining the “increase” rating.

Risk warning: Risk of new product industrialization falling short of expectations; risk of automobile demand falling short of expectations; risk of falling consumer electronics demand; risk of exchange rate risk; risk of trade friction; risk of raw material supply and price fluctuations.