Incident: The company released its 2023 annual report and 2024 quarterly report. It achieved revenue of 2,616 billion yuan for the full year of 2023, -17.94% year-on-year, and realized net profit of 281 million yuan, -67.86% year-on-year, after deducting non-net profit of 212 million yuan, -74.99% year-on-year. 24Q1 achieved sales revenue of 729 million yuan, +42.03% year-on-year, and realized net profit of 54 million yuan, +80.04% year-on-year, after deducting non-net profit of 50 million yuan, +713.11% year-on-year.

Global semiconductor sales improved in 23Q4 and are expected to grow in 2024. There was no significant improvement in global macroeconomic weakness in 2023, overall demand in the semiconductor industry was still sluggish, and global semiconductor sales declined year on year. 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. In particular, in 23Q4, global semiconductor sales were US$146 billion, up 11.6% year on year, up 8.4% month on month, all showing year-on-month growth. Global semiconductor sales showed an improving trend. As inventory gradually disappeared and market demand gradually recovered, growth is expected in 2024.

Continuing to increase investment in R&D, the number of new products launched in 2023 reached a record high, protecting the company's long-term development.

In 2023, the company spent 737 million yuan on R&D, +17.78% over the same period, and launched more than 900 new products to further expand its product portfolio and market application areas to meet the diverse needs of customers. As the company's high-performance products continue to be launched, it is expected to drive the average unit price and average gross margin of the product.

Texas Instruments recently stated that inventory adjustments for some industrial customers are nearing completion. Looking ahead to 2024, we believe that as demand gradually recovers and industry inventories are basically eliminated, Shengbang is expected to achieve restorative growth with rich product numbers and customer base.

Profit forecast: The company's 24-26 revenue is forecast to be 32.78, 40.24, and 4.850 billion yuan, respectively, and net profit to mother of 4.51, 6.77, and 90 billion yuan. Based on the company's rich product numbers and multi-field layout, it maintains an “gain” rating.

Risk warning: industry competition intensifies; downstream demand recovery falls short of expectations; new product development falls short of expectations