The 2023 annual report is in line with the performance report. The company disclosed its 2023 annual report, with revenue of 14.65 billion yuan (YoY +6.9%), net profit to mother of 980 million yuan (YoY +1.6%), gross profit margin 22.7% (YoY+1.6pct), and net profit margin of 6.7% (YOY-0.3pct). 2023Q4 had revenue of 3.89 billion yuan (YoY +30.7%), net profit to mother of 240 million yuan (YoY +105.1%), gross profit margin of 23.4% (YoY 0.5pct), net profit margin 6.2% (YoY+2.2pct), sales/management/finance/R&D expense ratios of 4.9%/7.1%/0.6%/3.7%, respectively, -0.5pct/-0.4pct/-1.0pct.
Driven by 24Q1 export sales, revenue continued to grow rapidly. The company disclosed its 2024 quarterly report. 2024Q1 achieved revenue of 3.47 billion yuan (YoY +22.8%), net profit to mother of 170 million yuan (YoY +24.7%), gross profit margin 21.9% (YoY+0.0pct), net profit margin 5.0% (YoY+0.1pct), and sales/management/finance/R&D expense ratios of 4.0%/5.5%/-0.9%/3.8%, year-on-year, -0.3 pct.
24Q1 Export sales remained strong, and domestic sales continued to improve. By region, export revenue in 2023 was 10.81 billion yuan (YoY +11.1%), domestic sales revenue was 3.84 billion yuan (YoY -3.2%); 24Q1 export revenue was 2.57 billion yuan (YoY +30.0%), and domestic sales revenue was 9.1 billion yuan (YoY +7.0%), an improvement of 6.5 pct over the 23Q4 growth rate. By sales model, global foundry revenue in 2023 was 11.94 billion yuan (YoY +10.4%), and OBM revenue was 2.71 billion yuan (YoY -6.1%).
Profit forecasting and investment advice. I am optimistic about the inflection point of the company's export sales and the continuous increase in share due to strong manufacturing capabilities. Domestic sales of its own brands have achieved good growth through continuous product innovation. Net profit due to mother is expected to increase by 15.3%, 10.5%, and 10.1% year-on-year in 2024-26, giving the company 15xPE in 2024, corresponding to a reasonable value of RMB 20.57 per share, maintaining a “buy” rating.
Risk warning. Overseas demand is sluggish; raw material prices have risen sharply; exchange rates have fluctuated greatly.