Incident: The company released its annual report for '23 and its quarterly report for '24, with revenue of $4.378 billion, YoY +19.05%; net profit to mother of $1,122 million, YoY +4.95%; net profit after deducting non-return to mother of $1,095 million, YoY +2.78%.
In the 24Q1 quarter, revenue was 1.119 billion, YoY +67.16%, QoQ -8.80%; net profit to mother was 198 million, YoY +69.83%, QoQ -34.81%; net profit after deducting non-return to mother was 194 million yuan, YoY +64.82%, and QoQ -30.74%. The month-on-month pressure was mainly due to seasonal fluctuations and increased Xinzhuo construction costs.
The SAW filter process R&D platform was completed, and the 12-inch IPD platform was transformed from R&D to mass production.
The performance of the company's MAX-SAW filters can reach the level of BAW and FBAR below sub-3GHz. The cost advantage is remarkable, and they have been mass-produced with high yield. At the end of '23, the 6-inch filter production line shipped more than 8,000 pieces/month. The first phase production capacity was planned to be 10,000 pieces/month, and the second phase increased to 16,000 pieces/month. Integrated self-produced filters such as DiFeM, L-DiFem, GPS modules, etc. continue to release, and filter modules have become the largest product among 23H2 modules. Furthermore, the reliability and performance of our own IPD filters have been recognized by many customers, and L-pamif and LFEM, which integrate self-produced IPD filters, have been verified by many customers.
Large-scale mass production of self-built production lines combined with high R&D investment, and the share of high-end modules has risen steadily. In '23, 24Q1 companies' R&D expenses reached 629 million and 269 million respectively, +40% and 119% compared with the same period. The R&D expenses ratio was 14.37% and 22.59%, which continued to rise. R&D investment gradually turned into results, and the share of high-end module sales rose from 30.42% in '22 to 36.34% in '23.
The downstream mobile phone market is recovering quarter by quarter, and the equity incentive plan reflects confidence in growth. According to IDC data, after 23 years of high inventories, global smartphone shipments increased 7.8% year over year to 289 million units in 24Q1, maintaining growth for the third consecutive quarter, and the recovery is expected to continue. As industry inventories stabilize, Canayls predicts that global smartphone shipments will be around 1.17 billion units in 24, and demand for the company's related products is expected to recover.
The company announced the 2024 equity incentive plan. The conditions for granting 100% equity incentives were 50.77, 60.93, and 7.07 billion yuan in 24-26 revenue, respectively, +16%, 20%, and 15%, respectively.
Profit forecast: The company's net profit for 24-26 is estimated to be 1,388, 16.23, and 2.010 billion yuan, respectively, and the corresponding PE is 35.7, 30.5, and 24.6 times, respectively, maintaining the “increase in holdings” rating.
Risk warning: Mobile phone shipments fall short of expectations, product prices fluctuate, and market competition intensifies.