The 23-year performance was high year-on-year, and the share of overseas revenue increased rapidly. The company achieved revenue of 1,020 million yuan, +50.2% year over year; net profit to mother was 203 million yuan, +54.3% year over year; net profit after deducting non-return to mother was 165 million yuan, +39.5% year over year. On a quarterly basis, 23Q4 achieved revenue of 452 million yuan, +77.2% year over month; net profit to mother of 0.93 million yuan, +71.0% year on year and +132.5% month on month; net profit without return to mother was 82 million yuan, +63.0% year on year and +156.3% month on month. 23Q4's performance increased year over year and month over month.

Looking at the domestic market, due to price reductions in LED screen manufacturers and iterative upgrades of 2K/4K/8K technology, screen shipments increased, pixel points increased, and the company's demand for receiving cards and video processing equipment grew rapidly, driving a high increase in domestic sales revenue. Looking at overseas markets, the company's overseas revenue in '23 was 136 million yuan (+94.5%), accounting for 13.4%, or +3.0 pcts compared to the previous year, mainly because: 1) Direct sales distribution of two-wheel drive: increasing the overseas market share of receiving cards by strengthening direct sales channels and deepening distribution channels to drive the growth of video processing equipment sales revenue; 2) Increased brand awareness: the company actively participated in exhibitions and promotion activities with American and Dutch subsidiaries as fulcrums, broadened the company's influence on a global scale; 3) Recruiting local employees overseas: through overseas recruitment of local employees, The level of pre-sales and after-sales service of products has been further improved.

Due to downstream customer inventory removal, 24Q1 performance was under pressure. The company achieved operating income of 143 million yuan in 24Q1, +7.6% year-on-year and -68.4% month-on-month; net profit to mother of 0.19 million yuan, -35.4% year-on-year and -79.6% month-on-month; net profit after deducting non-return to mother of 0.05 billion yuan, -74.2% year-on-year and -93.9% month-on-month. Affected by downstream customers removing inventory, the 24Q1 company's revenue growth rate slowed year on year, while sales, management, and R&D expenses increased sharply year on year, leading to a year-on-year decline in the company's net profit, and pressure on 24Q1 performance.

Gross margin increased year-on-year in '23, and sales expenses increased significantly. 1. Gross profit margin: The gross margin for 23 years was 48.1%, +5.9 pcts compared to the previous year, mainly due to: 1) product structure optimization, the share of revenue from high-margin video processing equipment increased; 2) the share of overseas revenue (high gross profit margin) continued to increase. 24Q1 gross margin was 47.4%, +1.6 pcts year over year and -1.8 pcts month over month. 2. Expenses: The cost rate for the 23-year period was 26.3%, +2.5pct; among them, sales, management, R&D, and finance expenses were 11.6%, 4.5%, 10.3%, and -0.1%, respectively, +3.1, -1.1, +0.7, and -0.3 pcts, respectively; the sharp increase in sales expenses was mainly due to the company's efforts to build domestic channels in 23, while actively building overseas marketing outlets to recruit local employees. Sales expenses increased dramatically. The 24Q1 company's expense ratio was 47.1%, +11.3 pcts year on year; among them, sales, management, R&D, and finance expenses were 18.2%, 7.4%, 20.9%, and 0.7%, respectively, +2.5, +5.8, and +0.7 pcts year-on-year, respectively.

Investment advice: Maintain a “buy” rating. Due to inventory removal from downstream customers, net profit to mother was reduced by 2.77/4.17/612 million yuan in 24-26 years (the value was 281 million yuan and 424 million yuan before 24/25), and the growth rates were 37%/50%/47%, respectively, maintaining the “buy” rating.

Risk warning: the risk of high customer concentration; the risk of high concentration of proxy procurement, etc.