Incident: The company released its 2023 annual report and 2024 quarterly report. It achieved revenue of 1,311 billion yuan for the full year of 2023, -21.52% year-on-year, net profit to mother of -305 million yuan, -221.85% year-on-year, and -393 million yuan after deducting non-net profit, -332.08% year-on-year. 24Q1 achieved sales revenue of 362 million yuan, -23.04% year-on-year, and +16.89% month-on-month. Net profit to mother was -150 million yuan, or -9677.28% year-on-year, after deducting non-net profit of -159 million yuan.
After a low in 23Q2, 23Q3-24Q1 recovered quarterly and is expected to continue improving in 2024. Global semiconductor sales declined year-on-year in 2023 due to factors such as macroeconomic downturn, weak demand in the terminal consumer market, and excess inventory. According to SIA, global semiconductor sales in 2023 were $526.8 billion, down 8.2% year on year. However, in the second half of 2023, global semiconductor sales rebounded, and global semiconductor sales showed an improving trend. As inventories are gradually removed and market demand gradually recovers, growth is expected in 2024.
New products such as magnetic sensors and automotive LED drivers are growing rapidly, and new product development is progressing smoothly. Magnetic current sensors have been widely used in automotive main drive motor current detection scenarios; high-current integrated current sensors have been shipped on a large scale; single-chip integrated industrial and vehicle standard temperature and humidity sensors with high-precision digital output have all been mass-produced; LED drivers that run through the taillights are continuously being released. In addition, products such as automotive-grade magnetic switches and magnetic wheel speed sensors have completed client sample delivery tests; new gauge pressure and differential pressure series pressure sensors under development are progressing smoothly; new products with multi-channel pre-drive motor drives and stepper motor drives have been launched, which have obtained multiple domain control and vehicle body control Tier-1 targets; the company's first high-side switch product has been introduced to leading automotive customers, and mass production is expected in 2024.
Inventory removal in most downstream sectors is nearing completion, and 24H2 is expected to gradually recover in the photovoltaic and energy storage markets. Overall demand in the automotive electronics sector grew steadily in 2023, and the boom in the consumer electronics sector improved, but the industrial market and photovoltaic and energy storage markets are still in the stage of inventory removal and gradual recovery.
Profit forecast: The company's 24-26 revenue is predicted to be 20.40 billion yuan, 25.29 billion yuan, and 3,028 billion yuan, respectively, and net profit to mother of -1.86, 0.71, and 298 million yuan, maintaining the “buy” rating.
Risk warning: market competition intensifies; downstream demand recovery falls short of expectations; new product development falls short of expectations