The company released its 2023 annual report and 2024 quarterly report. The company's performance was slightly pressured. In 2023, the company achieved total revenue of 21.47 billion yuan, a year-on-year decrease of 6.88%; net profit to mother was 65 million yuan, a year-on-year decrease of 49.54%. In the first quarter of 2024, the company achieved total revenue of 574 million yuan, an increase of 29.65% over the previous year, and realized net profit of 06 billion yuan, a year-on-year decrease of 64.33%. Demand from the company's downstream customers declined slightly in 2023, and the increase in R&D and sales expenses led to a slight pressure on performance. Based on this, we slightly lowered the company's 2024-2025 profit forecast and added a 2026 profit forecast. The company's net profit for 2024-2026 is 1.49/1.89/237 million yuan (the original value for 2024-2025 was 2.12/293 million yuan), and the corresponding EPS was 0.57/0.72/0.91 yuan/share, respectively. The PE corresponding to the current stock price was 36.7 /29.0/23.1 times, the company is progressing smoothly in overseas markets and emerging application fields, has broad room for growth, and still maintains a “buy” rating.
Product structure optimization has led to an increase in gross margin. In terms of the company's profitability in overseas market development, the company's gross margin/net margin in 2023 was 19.16%/2.92%, respectively, +1.30pct/-2.57pct. Product structure optimization brought about an increase in the company's high-margin product shipments, while increases in expenses and accrued credit and asset impairment losses affected net profit margins in stages. On the cost side, the company's sales/management/R&D/finance expense ratios were 2.97%/2.84%/9.96%/0.50%, respectively. The year-on-year change was +0.96/+0.48/+1.90/ -0.36pct. R&D and sales investment continued to increase, and the overall cost ratio was +2.98 pct year-on-year.
Looking at the subregions, the company's domestic/foreign revenue was 1,491/656 million yuan respectively, -15.29%/+20.27%, and gross margin was 17.90%/22.02%, respectively, +0.10/+3.98pct. The revenue scale of overseas customers increased significantly. At the same time, the gross margin of overseas markets increased significantly, providing sufficient momentum for the company's long-term stable development.
Wireless communication module+solution products are two-wheel drive, and application fields in emerging industries continue to expand the company's application fields in different vertical industries based on wireless communication module products. In terms of the intelligent connected vehicle business, the company's 5G smart cockpit modules have been adapted to multiple brands/models, and have been shipped in small batches, and project targets have been obtained one after another. At the same time, high-computing power module products will expand in the direction of advanced assisted driving, laying out the linkage between cockpit space and driving area; in terms of IoT business, cooperation with IoT customers in North America, Japan, and Europe continues to break through. Furthermore, the company is actively expanding into the emerging industries of advanced assisted driving, cloud servers, AR/VR, robotics, drones, and cloud computing, opening up room for future growth.
Risk warning: downstream demand falls short of expectations, product development progress falls short of expectations, and competition is fierce.