The company achieved operating income of 1,2006 billion yuan, +4.6% year over year; realized net profit of 180 million yuan, +19.55% year over year. Among them, revenue in the automotive electronics sector continued to grow high, and the smart home and communications sector continued to weaken due to the demand side. 2024Q1's revenue was 310 million yuan, +41% year over year; it achieved net profit of 55 million yuan, +96% year over year, and the performance exceeded expectations. It is estimated that it was mainly driven by the implementation of MR stocking demand from major downstream customers on the company's revenue side and the growth of the automotive electronics business.
The automotive electronics circuit has become a pillar revenue source for the company, and the growth momentum is optimistic. The company has entered the supply chain for customers such as BYD, Changan, Great Wall, and Wei Xiaoli, and the value of bicycle applications is constantly increasing. In the automotive sports screen project, the company has equipped some models such as Ideal and Changan Deep Blue. Electric tailgates and electric tailgates and electric tailgates are also gradually being mass-produced and delivered in new models, and new projects such as hidden doorknobs and charging gun locking actuators are also gradually being promoted and implemented. We estimate that the total value of bicycles that the company can support is close to 2,000 yuan. It is estimated that the automotive electronics sector will maintain a rapid growth rate of about 40% in 24 years.
On the medical and personal care circuit, the company mainly focuses on leading domestic and foreign medical device companies in the medical field and lays out intelligent medical products such as insulin injection pumps, pain relief pumps, staplers, and automatic injections. Future revenue depends on the progress of intelligent applications of medical terminal devices and the implementation of new projects.
On the smart home and communications circuit, the company was affected by low demand for terminals and the high procurement price sensitivity of downstream customers, and the overall trend continued to decline. It is expected that in the future, the company will give full play to its competitive advantage in technology, focus its business on micro transmission products with higher technical and R&D requirements, and gradually shrink the product line with fierce price competition and low profit margins.
At the XR circuit, the company's overall revenue contribution to major customer shipments in '23 was limited. According to our Vision Pro shipment volume estimates in the report “Apple Accelerates AI, MR Increases Shipment Volume Drives Further Implementation of Upstream Performance”, the company will gradually realize revenue on the XR track in '24. Regardless of the introduction of a second supply, we expect to contribute about 10% to the company's revenue.
Investment advice and profit forecasting
In the process of upgrading intelligent applications of terminal devices driven by artificial intelligence, the importance of micro transmission systems is constantly increasing. We are optimistic that XR amplification and the development of new automotive electronics projects will significantly drive the company's performance. The company's net profit for 24 years is estimated to be 240 million yuan, giving 60 xPE, corresponding to a share price of 85.3 yuan, maintaining a “buy” investment rating.
Risk warning
The development of the metaverse industry for major customers fell short of expectations, industry competition intensified, and the automotive business fell short of expectations.