Description of the event

The company released its 2024 quarterly report. 2024Q1 achieved operating income of 22.4346 million yuan, a year-on-year increase of 100.21%; realized net profit attributable to mother of 1.6022 million yuan, an increase of 72.47%; realized net profit deducted from mother of 4.5726 million yuan, an increase of 52.84% year on year; and achieved basic earnings per share of -0.004 yuan, an increase of 76.33% year on year.

Incident reviews

2024Q1's revenue doubled, and both net profit attributable to mother and net profit after deduction of non-return to mother showed a rapid growth trend. 2024Q1 achieved revenue of 22.434,600 yuan, an increase of 100.21% over the previous year. The main reason was that the company's products were verified and introduced by downstream users, and the number of projects entering the trial and mass production stages gradually increased, and the company's sales revenue increased in volume. 2024Q1's net profit to mother and net profit after deduction were -160.22 and -4.5726 million yuan respectively, up 72.47% and 52.84% respectively over the same period last year. Mainly, the company's sales revenue in the first quarter increased significantly faster than the cost side.

2024Q1's gross margin and net margin both improved significantly compared to the same period last year. 2024Q1's gross margin was 80.58%, up 4.81 percentage points from the same period last year; the net margin of 2024Q1 was -7.14%, up 44.8 percentage points from the same period last year. The optimization of gross margin was mainly due to the fact that revenue grew significantly faster than operating costs (2024Q1 company's revenue grew 100.21% year over year, significantly faster than operating cost growth of 60.49% year over year). The net interest rate optimization also benefited from the period expense ratio improvement:

2024Q1's sales period expense ratio was 122.23%, down 54.04 percentage points from the same period last year. Among them, the sales expense ratio, management expense ratio, financial expense ratio, and R&D expense ratio were 9.81%, 39.83%, -24.66%, and 97.25%, respectively, with changes of 0.88, -9.54, -26.09, and -19.29 percentage points, respectively, from the same period last year.

The company continues to increase investment in R&D, and the number of R&D projects continues to increase. Due to the increase in the number of R&D projects, 2024Q1 continues to increase R&D investment, and the number of R&D personnel and remuneration costs have increased.

2024Q1's R&D expenses were RMB 21.817,200, an increase of 67.07% over the same period last year, accounting for 97.25% of revenue.

Investment advice

The company is expected to achieve revenue of 4.63, 6.56, and 925 million yuan respectively in 2024-2026, with year-on-year increases of 46.0%, 41.7%, and 40.9%; net profit of 2.31, 3.20, and 438 million yuan, respectively, with year-on-year increases of 40.0%, 38.3%, and 36.6%; corresponding EPS is 0.58, 0.80, 1.09 yuan, and 1.09 yuan respectively. Based on the closing price of 33.30 yuan on April 30, the corresponding PE is 57.5X, 41.6X, and 30.4X respectively, maintaining the “increase in holdings” rating .

Risk warning

Market competition risks caused by product development failures and technology upgrade iterative risks, new customers and new market development risks, control risks of foundry and packaging manufacturers, market share, business scale, etc., and gaps with industry leaders.