Incident: The company released its 2023 annual report and 2024 quarterly report, with revenue of 3.567 billion yuan (+3.08%) for 23 years and net profit of 606 million yuan (+16.47%). 23Q4 revenue of $741 million (-7.29%), net profit to mother of $156 million (+31.45%); 24Q1 revenue of $693 million (-0.62%), net profit to mother of $121 million (+4.22%).
Revenue grew steadily in '23, with a year-on-year performance of +16.47%, and a record high net interest rate. The company achieved revenue of 3.567 billion dollars (+3.08%) in 23, and achieved a net profit of 606 million yuan (+16.47%) to mother. The profit growth rate was significantly higher than revenue. Net interest rate increased to 17% (+1.95pct), of which: gross margin increased to 32.28% (+1.62pct); the period expense ratio increased slightly to 13.11% (+0.55pct), mainly due to increased depreciation and amortization expenses, the management fee rate increased to 3.60% (+1.22pct), and all other expense ratios declined.
24Q1 performance was +4.22% year-on-year, and changes in product structure led to an increase in profitability. The 2024Q1 company achieved revenue of 693 million (-0.62%), mainly due to the impact of industry inventory removal; achieved net profit of 121 million yuan (+4.22%), increased net interest rate to 17.42% (+0.81pct), gross margin increased to 35.63% (+3.88pct) due to changes in product structure, and the period expense ratio increased to 15.57% (+1.81pct).
Fixed assets at the end of 23 were +108% compared to the beginning of the year, and cash flow improved significantly. At the end of 23, fixed assets were 1,354 billion yuan, +108.4% compared to the beginning of the year. RF integrated circuit industrialization projects were transformed and production capacity was expanded. Net operating cash flow of $839 million in '23 was a significant improvement over the year of -184 million yuan in '22, mainly due to the increase in the company's sales payback.
Based on compounds and combining military and civilian products, the company continues to explore new fields. Military: The company is a leading T/R component leader. Phased array technology is one of the core technologies for military radar and communication. The military informatization construction has been accelerated across the board. As the core target of military informatization, the company is expected to fully benefit. At the same time, the company has begun to deliver various products to customers in the low-orbit satellite and commercial aerospace fields. People: The development of new fields such as satellite communications and low-altitude economy has opened up new growth space for high-performance RF integrated circuits. The company's various RF integrated circuits have been used in 5.5G integrated sensing base stations, and RF front-end modules for drones have been shipped in batches. In addition, the company has delivered RF control chips for multiple terminals in batches, developed and completed RF amplification chip products such as WiFi and mobile phone PA, and is also developing new products.
According to the 2014 quarterly report, revenue was lowered and gross profit margin was adjusted to 1.68 and 2.11 yuan (previous values were 1.86 and 2.39 yuan), and the 26-year EPS was added at 2.60 yuan. Referring to the comparable company's PE 53 in 24 years, the target price was 89.04 yuan, and the target price was 89.04 yuan, maintaining the purchase rating.
Risk warning
Downstream demand falls short of expectations; terminal RF chip business development progress falls short of expectations