Incident: The company released its 2023 annual report, achieving full year revenue of 1,648 million yuan, +3.70% year over year; net profit to mother was 215 million yuan, +41.46% year over year.
Full year results are in line with expectations. On a quarterly basis, 23Q4 achieved revenue of 769 million yuan, -2.17% YoY, +110.58% month-on-month; net profit to mother was 174 million yuan, +42.25% YoY, +373.19%.
The gross margin increased year over year, and the expense ratio fluctuated slightly during the period. 1) Gross profit margin: The company's gross margin in 2023 was 41.66%, +1.11pct year-on-year. The year-on-year increase in gross margin was mainly due to the company's active promotion of cost reduction and efficiency.
Among them, 23Q4 gross margin was 43.05%, +4.93pct year over year, and -0.53 pct month-on-month. 2) Period fees:
The company's expense ratio for the 2023 period was 29.43%, -0.96 pct. Among them, sales, management, R&D, and finance expenses were 10.23%, 4.99%, 13.99%, and 0.23%, respectively, -0.81, +0.32, -1.23, and +0.76pct, respectively. The decline in R&D expenses is mainly due to the basic formation of the company's strategic product matrix.
Emerging businesses are progressing smoothly, and the strategic product matrix is becoming more mature. 1) Semiconductor sector: The TB1000, the first brightfield inspection device TB1000 for microscopic defect detection in the front of semiconductors, in which the company is a shareholder, was delivered to customers for trial in August '23, and verification is progressing well. German subsidiary MueTec continues to advance the development of overlay products and will launch overlay products for 40-65nm nodes in 24Q2. 2) Intelligent driving field: The company's autonomous driving domain controller products based on the Horizon Journey Journey 5 chip have made breakthrough progress in 23 years, and have obtained fixed-point intelligent driving domain controller development projects and proof of concept (POC) projects from OEMs such as GAC and SAIC. 3) PCB field: The company formed a complete business layout with 4 product lines in 23 years, and was recognized by leading customers in the industry such as Shanghai Electric Power Co., Ltd., Dongshan Precision, and Jingwang Electronics. 4) Photovoltaic field: The company launched a fully automatic copper grid graphic exposure equipment for the photovoltaic industry in November 23. The equipment is a cost-effective overall solution that can match R&D lines, pilot lines, and mass production lines. The stand-alone production capacity can reach more than 8,000 PCS/H, the line width resolution can reach within 10 μm, and the product maturity and technical indicators are in a leading position in the industry.
Profit forecast: We expect net profit to be 2.72 billion yuan, 3.46 billion yuan, and 450 million yuan respectively in 2024-26, maintaining a “buy” rating.
Risk warning: Downstream demand recovery falls short of expectations, expansion in new fields falls short of expectations, and industry competition intensifies.