occurrences
The company released the 2023 annual report and the 2024 quarterly report, and introduced the “2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures”.
The growth rate of the company's three business lines slowed to varying degrees in '23. It recovered in 24Q1 in 2023. The desktop communication terminal business achieved revenue of 2,544 billion yuan, a year-on-year decrease of 19.11%, and gross margin of 67.40%, an increase of 3.64 percentage points over the previous year. In 2023, there was a relative decline in desktop communication terminals, mainly due to the inventory removal cycle and a shift in demand in some industries affected by hybrid office trends.
In 2023, the conference products business achieved revenue of 1,466 billion yuan, a year-on-year increase of 12.81%, accounting for a further increase of 33.71% of overall revenue, and gross margin of 65.76%, an increase of 1.07 percentage points over the previous year.
The company reached a strategic partnership with Microsoft in the field of audio and video in '15, and launched SmartVision60 in '23, equipped with the latest AI technology between the company and Microsoft. In March of this year, the new generation of video conferencing host MeetingEye 500 Pro was launched to meet the needs of various scenarios in medium and large conference rooms.
In 2023, the cloud office terminal business achieved revenue of 323 million yuan, a year-on-year decrease of 10.33%, and gross margin of 53.90%, an increase over the previous year. In 2023, the company continued to improve the competitiveness of the headset product line, completed the iterative upgrade of BH series business Bluetooth headsets, and achieved good channel verification results.
In 2023, the company's three expense ratios: management expenses of 133 million yuan, up 19.13% year on year; sales expenses reached 276 million yuan, up 7.91% year on year; financial expenses reached -036 million yuan, down 71% year on year, mainly due to changes in the US dollar exchange rate.
The company achieved revenue of 1,164 billion yuan in 24Q1, an increase of 30.95% over the previous year, and realized net profit of 569 million yuan, an increase of 34.45% over the previous year. Exchange rate fluctuations of $24Q1 had a positive impact on the company's profits. Financial expenses were -013 million yuan, and 23Q1 was 221 million yuan.
The company actively repaid investors. The dividend ratio for the full year of '23 reached 87.90%, and the dividend ratio was close to 4%. The company reported dividends of 631 million yuan in the semi-annual report in '23, the dividend of 1,136 million yuan in the '23 annual report, and the dividend for the full year of '23 reached 1,767 billion yuan, which is close to 4% compared to the current market capitalization (46.6 billion dollars) dividend rate. As of the 2023 annual report, the company's distributable profit reached 5.499 billion yuan.
The company announced a new round of stock incentive plans. The target revenue & profit growth rate for 24 years was 20%. The company issued the “2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures” at the same time. The performance assessment requirements are based on revenue and net profit for 23, with a growth rate of no less than 20% in 24, and no less than 40% growth rate in 25 years compared to 23. Taking the 20% year-on-year increase in '24 as a reference, the year-on-year growth rate of revenue and net profit in '25 was not less than 17%.
Investment recommendations and profit forecasts:
We believe that maintaining a high level of R&D investment (CAGR 38% in 17-22, accounting for nearly 10% of R&D investment in '22) and continuous product iteration are the core factors that guarantee the competitiveness of the company's product market. In the short term, the company continues to iterate on technology and products, and has successively launched new products such as SmartVision 60 and MeetingEye 500 Pro in the field of video conferencing, which is expected to have a positive impact on this year's operations. The medium- to long-term development trend continues to improve, considering that the company's performance was previously affected by weak global macroeconomic trends, which put pressure on its performance.
Considering that the short-term recovery in overseas demand is still unclear, compounded by exchange rate fluctuations, etc., based on the precautionary principle, we lowered the company's net profit to mother of 2,677 billion yuan and 3.336 billion yuan in 24-25 to 2,818 billion yuan and 2,813 billion yuan. The company is expected to achieve net profit of 3.327 billion yuan in 2026, maintaining a “buy” rating.
Risk warning: The scale of the mobile phone industry is shrinking, the competitive pattern in the video industry is intensifying, the development of cloud office business falls short of expectations, exchange rate fluctuations, etc.