“Science and Technology Innovation Board Daily”, April 25 (Reporter Wu Xuguang) On the evening of April 24, Communication Holdings released its financial report for the first quarter of 2024.

Financial reports show that in the first quarter of 2024, the company achieved operating income of 17.443 billion yuan, an increase of 88.1% year on year; net profit of 1,626 billion yuan, up 210.3% year on year; net profit after deduction of 1,354 billion yuan, an increase of 342.59% year on year.

Regarding changes in performance, the company said that revenue growth mainly benefited from continuing to develop emerging markets and promote product upgrades, and overall shipment volume growth; the increase in net profit was mainly due to an increase in operating income, an increase in gross profit, and a decrease in expense ratios.

The “Science and Technology Innovation Board Daily” reporter noticed that Communication Holdings achieved revenue of 19.27 billion yuan in the fourth quarter of 2023; realized net profit and net profit after deduction were 1,653 billion yuan and 1,625 billion yuan respectively.

Based on this calculation, in 2024, the company's revenue in Q1 fell 9.49% month-on-month; net profit and net profit after deduction fell 1.6% and 16.68% month-on-month.

In response to the company's month-on-month decline in revenue and net profit in the first quarter of this year, the “Science and Technology Innovation Board Daily” reporter called Chuanyin Holdings Securities. Staff said that the company's performance declined month-on-month. First, judging from the industry's historical cycle, the first quarter was originally a low season for the communications industry, and sales data for the second half of the year were better than in the first half; second, the first quarter coincided with many domestic and foreign holidays, etc., which affected the company's mobile phone sales in the first quarter.

Regarding the 2024 full-year performance forecast, the aforementioned staff said that judging from the overall mobile phone market trend, the market recovery since this year is expected to be better than last year. On the one hand, the sales scale of the African and South Asian markets, where the company has traditional advantages, has recovered; on the other hand, the company is also continuing to expand emerging markets such as Southeast Asia, the Middle East, and Latin America. Compared with countries and regions such as Africa and Bangladesh, the company is expected to become a new profit growth point in markets other than Africa and South Asia.

Communication Holdings' main products are TECNO, iTEL, and Infinix phones of the three major brands, including feature devices and smart phones. The sales area is mainly concentrated in emerging markets around the world, such as Africa, South Asia, Southeast Asia, the Middle East, and Latin America. In the first quarter of 2024, the gross margin of Communication Holdings was 22.15%, down 1.21 percentage points year on year; down 2.3 percentage points from month to month.

The company's staff said that the fine-tuning of gross margin was mainly due to varying degrees of increase in internal mobile phone supply chain device prices in the first quarter of this year.

Some industry analysts said in this regard that due to factors such as production cuts, since the fourth quarter of 2023, the world's major storage companies have started a DRAM product price increase model, and the price of high-capacity storage products has continued to rise. The market is at present. With demand for smartphones and the like picking up, small to medium capacity storage products have entered a range of price increases, and price increases are expected to continue until the end of 2024.

In the secondary market, as of the close of trading on the day the first quarterly report was published (April 24), the stock price of Chuanyin Holdings was reported at 162.91 yuan/share, down 0.97%. Currently, the total market value of the company is 131.4 billion yuan.