Event Overview: Company Releases 2023 Annual Report and 2024 First Quarter Report [23]
Revenue of 1,775 billion yuan, a decrease of 31.11%; net profit attributable to mother was 45 million yuan, a decrease of 90.21%; non-profit and loss of 122 million yuan, mainly due to investment income from mergers and acquisitions plus government subsidies; deducted non-net profit of -77 million yuan, a decrease of 119.38%; gross margin was 57 million yuan.
06%, an increase of 0.31pcts.
[23Q4]
Revenue was 566 million yuan, down 31.21% from the same period and 26.62%; net profit to mother was 0.44 million yuan, down 67.70% from month to month, and was -019 million yuan in 23Q3; net profit after deducting non-return mother was 0.3 billion yuan, down 77.13%% from month to month, and corrected from month to month in 23Q3. The gross margin was 56.12%, down 6.34pcts and 4.98pcts.
[24Q1]
Revenue was 559 million yuan, up 74.81% from the same period, down 1.24%, and net profit attributable to mother was 0.04 million, reversing the loss year on year. 23Q1 was -57 million yuan, down 90.91%; after deducting non-net profit, the year-on-year loss was 0.2 billion yuan, reversing the year-on-year loss. 23Q1 was -67 million yuan, down 93.33%. The gross margin was 54.60%, down 1.4 pcts year on year and 1.52 pcts month on month.
The economy is sluggish and performance is under pressure, and 24Q1 revenue is now improving
The company's revenue declined year-on-year in '23, mainly due to: 1) Traditional sorters/probe stations/digital-analog hybrid testing machines were affected by the downturn in the downstream economy, and shipments were poor. Among them, testing machine revenue was 676 million yuan, down 39.44%, and sorter revenue was 820 million yuan, down 34.69%; 2) the pace of order confirmation revenue from major customers slowed down. 24Q1 revenue increased 74.81% year over year, and net profit to mother reversed losses year on year, showing an improvement trend. At the same time, the company continued to invest in R&D to strengthen project reserves. In 23, R&D expenses reached 715 million yuan, accounting for 40.28% of revenue, an increase of 15.25 pcts, 24Q1 R&D expenses of 180 million yuan, accounting for 32.2% of revenue, putting pressure on profits in the short term, and net profit was not fully released.
Major customer strategy+cycle recovery, 24-year performance is expected to improve
1) The company adheres to the big customer strategy and leads breakthroughs in the localization of digital testing machines. In 2019, the company launched a new digital testing machine D9000, which can be used to test digital chips such as mobile networks, mobile phone basebands, etc., as well as 5G chips. In addition, the company also plans to develop a series of products such as high-speed digital testers and memory testers. The localization rate of such products is low, and Changchuan Technology is expected to achieve a rapid breakthrough in localization based on the big customer strategy. 2) The 24H1 semiconductor boom is expected to recover, and the company's traditional business orders are expected to follow the recovery. Combined with digital testing machines and traditional business, the company's overall performance is expected to improve in 2024.
Endogenous and extrinsic processes combine to bring products and production capacity to the next level
Endogenous: The first phase of the company's Neijiang base was initially completed (project progress is 30%). It is engaged in R&D and manufacturing of testing machines and sorting machines. The revenue for 23 years was 350 million yuan. The completion of the Neijiang base and the release of production capacity laid the foundation for the company's revenue expansion. Outreach: The company completed the merger with Chang Yi. Changyi's core product is a turret sorter, with 23-year revenue of 85 million yuan. Through the acquisition of Changyi, the company achieved a comprehensive layout of gravity, translational, and turret sorters, and achieved collaboration with Changyi in terms of sales channels and R&D technology.
Investment advice
In view of the company's impact on the economy exceeding expectations, we updated the company's revenue for 2024-2026 to RMB 33/40/50 billion (the original forecast was RMB 52.85/6.105 billion yuan) and adjusted the company's net profit forecast for 2024-26 to RMB 555/666/8.4 billion (the original forecast was RMB 950/1,221 million yuan), and the corresponding PE was 32/27/21X, maintaining the “buy” rating.
Risk warning
The economic recovery fell short of expectations; new product development and market launch fell short of expectations; demand from major customers fell short of expectations.