Incident: On April 24, 2024, the company announced first-quarter results, achieving revenue of 1,058 billion yuan, +13.28% year over year; net profit to mother was 73 million yuan, +25.05% year over year.
The performance was in line with expectations. The 24Q1 company's performance increased year-on-year, mainly due to weak downstream demand in the same period last year, resulting in a low performance base. At the same time, demand has recovered since '23, and the superimposed company has continued to increase market development, promote the extension of product applications from consumer grade to industrial grade and vehicle grade, and drive performance growth.
Gross margin decreased slightly month-on-month, and expenses increased year-on-year during the period. 1) Gross profit margin: In 24Q1, the company's gross margin was 16.79%, +5.72pct year on year, and -0.92% month on month. The sharp year-on-year increase in gross margin was mainly due to the fact that the 23Q1 utilization rate was at a low level, and the operating rate was recovered quarterly in '23. 2) Period expenses: The 24Q1 company's expenses rate was 10.20%, +4.86pct year-on-year. Among them, the sales, management, R&D, and financial expense ratios were 1.82%, 6.77%, 4.53%, and -2.93%, respectively, +0.38, +1.71, -0.11, and +2.88pct.
The technical level continues to improve, and high-end products continue to make breakthroughs. 1) Production capacity side: The company's Xianghe project, which positions the industrial-grade and high-end consumer markets, was officially put into trial production in 23 years; it invested 600 million yuan and implemented the “monthly production of 4 billion laminated inductors” and “monthly production of 100 million integrated inductors” technology transformation and production expansion projects to complete the project and enter the construction period. 2) Product side: The company continues to focus on high-end transformation. The high-end MLCC pilot platform, high-end electronic material platform, thin-film micro-nano platform, and reliability testing and analysis platform have all been built and put into use in 23, further consolidating the independent research and development capabilities of materials, processes and products throughout the industry chain, and improving the conversion rate of R&D results for high-capacity products and high-end materials. In the long run, we are optimistic that the company will continue to innovate technology, enrich product categories, improve the technical level and delivery capacity of automotive electronics and industrial control application products, and increase market development in emerging fields such as AR, VR, photovoltaics, wind power, etc., thereby expanding the market share of superior products and high-quality special products, and optimizing and upgrading the product structure.
Profit forecast: We expect net profit to be 3.92 billion yuan, 5.26 million yuan, and 776 million yuan respectively in 2024-26, maintaining a “buy” rating.
Risk warning: Terminal demand recovery falls short of expectations; mass production of high-end products falls short of expectations, etc.