Key points of investment
The downstream market gradually recovered, and profitability gradually recovered. In '23, we achieved revenue of 578 million yuan, +10.01% year over year, of which sales volume increased 26.72% year on year, driving sales revenue growth starting in the third quarter; net profit to mother of -0.19 million yuan, -150.24% year on year; gross profit margin of 23.57%, or -4.39% year over year. 2024Q1 achieved operating income of 136 million yuan, +2.48% year over year; net profit to mother of 003 million yuan, turning a year-on-year loss into profit; gross profit margin of 26.59%, +4.15% year over year.
Continue to increase investment in R&D and bind core technical personnel. R&D expenses for the full year of 2023 were 159 million yuan, an increase of 38.21% year over year. At the same time, the company continues to introduce outstanding R&D talents. By the end of 2023, the company had 268 R&D personnel, accounting for more than 74% of the total number of employees. The company continues to grant equity incentives to the core team, generating a total of 20.7845 million yuan in share payments throughout 2023. In 2024, the company announced a new employee stock ownership plan. Among them, the company-level performance assessment target is based on 2023 revenue, the 2024 revenue growth rate is 20%, and the gross margin is not less than 25%.
Product categories continue to be promoted, and the structure is continuously optimized. In the AC-DC field, the company launched various products such as interleaved PFC and LLC to actively promote the localization process of high-power fast charging (up to 240W) and high-power power supply (up to 3000W) applications; in the DC-DC field, it is actively developing high-current products above 8A and high-voltage products above 60V. Among them, CMCOT architecture DC-DC products with 100V high voltage resistance have been introduced to customers and tested; in the field of battery management chips, the company actively develops and supports daisy chain cascading for 200-800V high voltage segment applications BMSAFE chips are also promoting certification of ISO26262 functional safety standards. The target areas are large-scale energy storage systems and new energy vehicles; in the motor drive field, the company completed the new layout of this business segment and vigorously promoted the R&D process through the acquisition of Dongxin Micro Chengdu. Currently, a number of single-phase BLDC motor drive control chips have been applied in batches to cooling systems in applications such as CPUs, GPUs, PCs, servers, and lithium battery energy storage. In addition, the company has vigorously expanded the layout of signal chain products such as amplifiers, converters, sensors, isolation chips and interface chips. Using industrial, communications, and new energy customer groups such as household appliances, photovoltaic energy storage, and high-power power supplies as a focus, the company has launched a series of signal chain products and successfully delivered samples. Among them, operational amplifiers and USB & Type-C interface chips have been mass-produced.
Investment advice:
We expect the company's 2024-2026 net profit of 0.3/0.6/100 million yuan to maintain a “buy” rating.
Risk warning:
The recovery in downstream demand fell short of expectations; the competitive landscape of the industry increased risks; and the development of new products fell short of expectations.