Incident: The company released its 2024 quarterly report, 2024Q1. The company achieved revenue of 602 million yuan, +110.68% year over month; net profit to mother of 101 million yuan, +224.79% year on month, +23.91% month on month; net profit without return to mother of 100 million yuan, +226.69% year on year and +32.80% month on month.
Earnings were not poor in the off-season, and gross margins remained steady. Since 2023Q3, demand in the downstream mobile phone market has picked up. Although the first quarter was a traditional low season, the company, as a global leader in mobile phone charge pump charging chips, has fully benefited from the recovery in industry demand and the continuous increase in the average charging power of mobile phones. The business scale continues to grow, and revenue is not weak during the off-season. 2024Q1's gross margin was 42.57%, +1.34pcts y/y and +0.04pct month-on-month. The company's gross margin increased year-on-year, and remained relatively steady from month to month, reflecting the steady operation of the company and continuous improvement in its product and cost structure.
R&D investment is increasing, laying out future core growth momentum. 2024Q1's R&D expenses were 90 million yuan, +58.56% year-on-year. By the end of 2023, the number of R&D personnel in the company was 378, an increase of 32.17% over the previous year, and the number of R&D personnel accounted for 65.40% of the company. In 2023, the company obtained 29 new authorized invention patents, and obtained a total of 89 patents, all of which are invention patents; the company added 7 self-developed core technologies, namely lithium battery monitoring technology, zero-voltage switch charge pump control technology, low voltage self-starting technology, secondary control fully integrated soft switch Flyback technology, Smart High Side Driver technology, automotive-grade smart fuse technology, and automotive antenna LDO technology. The above technologies have all been applied to the company's products.
Revenue from new product lines is growing rapidly, and room for growth continues to open up. In terms of automobiles, in 2023, the company achieved revenue of 30,641 million yuan, +89.02% over the same period. The products were introduced to many well-known leading customers in the industry. The company's USB and wireless charging solutions achieved large-scale mass production on the client; new products such as high-performance DC-DC power chips, HSD chips, and e-Fuse chips achieved large-scale sample delivery on the client side, and some customers have already entered the targeted design stage of the project. In terms of smartphone power management, in 2023, the company launched a 300W fast charging chip to further maintain its leading position in the industry. At the same time, the company continued to improve the product layout of the overall smartphone charging link, reached deep partnerships with wired charging chips and mobile phone manufacturers, actively promoted the introduction of other product lines on mobile phones, and continued to increase the value of stand-alone devices.
Investment advice: We expect the company to achieve operating income of 2,422/31.67 billion yuan and net profit to mother of 3.86/5.37/665 million yuan in 2024/2025/2026. The corresponding PE was 38.23/27.51/22.20 times, respectively, maintaining the “gain” rating.
Risk warning: New product development and sales fall short of expectations; industry demand falls short of expectations; industry competition intensifies.