occurrences
On April 17, the company disclosed a voluntary disclosure announcement on the results forecast for the first quarter of 2024. It is expected that 24Q1 will achieve revenue of 1.7-18 billion yuan, an increase of 299.54%-323.04%; realized net profit to mother of 150-180 million yuan, an increase of 219.03%-242.84%, turning a loss into a profit; and achieving net profit without return to mother of 1.5-180 million yuan, an increase of 216.17%-239.40% over the previous year.
Key points of investment
Continued recovery in the storage industry is driving high growth in performance. It is expected that 24Q1 will achieve revenue of 1.7-1.8 billion yuan, an increase of 299.54%-323.04%; the net profit to the mother will be 150-180 million yuan, an increase of 219.03%-242.84% year-on-year, turning a loss into a profit; the main reason is that since 23Q4, the storage industry has picked up, and downstream customer demand has continued to recover. The company has vigorously expanded first-line customers at home and abroad, and product sales increased significantly year-on-year. At the same time, the price of storage products continues to rise, and the company's operating performance continues to improve. The company's 24Q1 share payment fee was approximately RMB 85 million. Excluding share payment fees, net profit attributable to mother was RMB 235-265 million.
Continue to increase research and development to strengthen core competitiveness. The company follows the upgrade direction of large memory capacity, high bandwidth, low latency, low power consumption, high security, and small size, and continues to innovate in six major application fields, including mobile smart terminals, PCs, industry terminals, data centers, smart cars, and mobile storage, and has created a full range of differentiated product systems and services, mainly including embedded storage, consumer storage, industrial storage, and advanced packaging services; it has laid out a complete product line matrix of embedded storage, solid state drives, memory modules, memory cards, etc., covering all major product line matrices of embedded storage, solid state drives, memory modules, memory cards, etc. category. The company continues to increase R&D investment in the fields of storage solution research and development, chip design, advanced packaging and testing equipment, and continues to enhance its core competitiveness. 24Q1 R&D expenses were about 100 million yuan, an increase of more than 200% over the previous year.
Investment advice
We expect the company to achieve revenue of 36/80/10.8 billion yuan in 2023/2024/2025, and net profit to mother of 5.88/8.05/1,171 million yuan respectively. The current stock price corresponding to 2024/2025 PE is 24/17 times, respectively, maintaining a “buy” rating.
Risk warning
Risk of R&D failure, risk of loss of core technology, risk of loss of technical personnel, risk of changes in macroeconomic environment and decline in performance, risk of fluctuating raw material prices, risk of high supplier concentration, risk related to brand licensing business, risk of fluctuations in gross margin and performance due to fluctuations in memory product prices, risk of large inventory amounts and falling inventory prices, risk of negative net cash flow from operating activities, macro-environmental risk.