Incidents:
On April 22, 2024, the company released the 2023 Annual Report and the 2024 First Quarter Report. In 2023, the company achieved operating income of 606 million yuan, a year-on-year decrease of 26.55%; net profit to mother was 0.26 million yuan, a year-on-year decrease of 76.61%; net profit after deducting non-return to mother was 08 billion yuan, a year-on-year decrease of 91.87%. With 2024Q1, the company achieved operating income of 180 million yuan, a year-on-year increase of 0.27%; net profit to mother - 0.05 billion yuan, a year-on-year decrease of 117.66%; net profit without deducted to mother - 0.07 billion yuan, a year-on-year decrease of 129.42%.
The company continues to promote high-speed product development and delivery
The company continues to promote independent R&D and production of high-speed products. In 2023, the 200G channel optical engine design and verification was completed. The 800G DR4 and 1.6T 2X DR4 projects based on single-wave 200G were carried out in an orderly manner. Among them, 800G DR4 successfully completed prototype tests. On the 400G side, the company has completed batch delivery of 400G optical modules using 7nm advanced process chips and 16nm advanced process chips, and 400G optical modules based on EML modulation technology have been shipped in large quantities. In terms of 800G, the company's 800G optical modules using 7nm advanced process chips have been shipped in small batches, and 800G optical modules based on SIP and TFLN modulation technology are in the sample stage.
The fund-raising project is progressing steadily, and both domestic and foreign operations are being carried out in full
In 2023, the company will continue to promote the construction of fund-raising projects, and the new industrial park and manufacturing base are expected to be put into use one after another in 2024. With the gradual commissioning of fund-raising investment projects, the company's production capacity and delivery capacity are expected to increase further. In order to speed up the overseas market business layout, the company invested in the construction of a manufacturing center in Malaysia to accelerate the integration of overseas resources, expand the market share of international business, increase the share of the company's products in the international market, and enhance the influence and market coverage of overseas brands. The Malaysian manufacturing base project was officially put into operation in 2023Q4.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 888/11.86/1,601 billion yuan, respectively, with year-on-year growth rates of 45.00%/35.00%, net profit to mother of 1.03/1.39/183 million yuan respectively, with year-on-year growth rates of 288.72%/34.98%/31.91%, EPS of 0.79/1.07/1.41 yuan/share, respectively, and a 3-year CAGR of 90.57%. Since the company has shipped 400G optical modules in large quantities, different series of 800G optical modules have completed prototype tests or small batch shipments, so it is recommended to continue to pay attention.
Risk warning: Downstream demand falls short of expectations; risk of exchange rate fluctuations; market competition increases risk; trade control between China and the US increases risk.