Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 255 million yuan, +15.08% year over year; net profit to mother was 87 million yuan, +7.20% year over year. 24Q1 achieved revenue of 25 million yuan, +28.74% year over year; net profit to mother was 0.3 billion yuan, +10.82% year over year.
The performance was in line with expectations. The company's performance continued to grow in 2023 and 24Q1, mainly due to the company's continuous promotion of iteration of existing core products and new product development, gradual improvement of the product matrix, continuous expansion of downstream application fields, and a steady increase in product market share.
Gross margin increased year-on-year, and R&D investment continued to increase. 1) Gross profit margin: The company's gross margin in 2023 was 68.01%, +1.54pct year-on-year. Among them, 23Q4 gross margin was 70.43%, +2.57pct year over year, and +1.83 pct month-on-month. 24Q1 gross margin was 68.93%, -0.13pct yoy and -1.50pct month-on-month. 2) Period expenses: The company's expenses rate for the 2023 period was 30.91%, +8.48pct year on year. Among them, sales, management, R&D, and finance expenses were 9.20%, 6.07%, 22.38%, and -6.74%, respectively, +0.69, +1.10, +6.55, and +0.13pct, respectively. The sharp increase in R&D cost rates is mainly due to the company continuing to increase R&D investment. While upgrading and iterating an existing series of products, it continues to carry out new technology engineering and commercialization research, laying the foundation for breakthroughs in core product functions and performance.
The core product matrix was gradually improved, and the application fields continued to expand. 1) Wireless channel simulator: As the company's leading product, the competitive advantage is highlighted, and with the continuous iteration of comprehensive performance and functions, it gradually forms an important breakthrough in the satellite communication, semiconductor testing and other markets; 2) RF microwave signal generators: the product is more mature, continues to be recognized by various downstream users, and the order volume is growing rapidly, contributing significantly to the company's performance; 3) Spectrum/vector signal analyzer: the new product is gradually being tested and tested by downstream users, and certain orders are formed; 4) Test and simulation equipment based on the HBI platform: the performance of general receiver products gradually reached the level of overseas competition , approved by customers.
Profit forecast: We expect net profit to be 1.11, 1.45, and 194 million yuan respectively in 2024-26, maintaining a “buy” rating.
Risk warning: New product development falls short of expectations; demand volume in emerging fields falls short of expectations, etc.