1Q24: Rapid growth in performance, year-on-year improvement in profitability
According to the company's 2024 quarterly report, 1Q24's revenue was 2.12 billion yuan, up 17.1% year on year; net profit to mother was 190 million yuan, up 33.8% year on year; net profit after deducting non-return to mother was 170 million yuan, up 27.4% year on year. 1Q24 The company's net profit achieved rapid growth. We judge that it mainly benefited from the growth of the company's automotive, PC and other businesses, as well as the year-on-year improvement in the company's profitability. We maintained the company's net profit forecast for 2024 to 2026 at 726/920/1,101 million yuan, respectively. Comparatively, the company's 2024 Wind agreed to have an average PE value of 26x, giving the company 26 x PE for 24 years, corresponding to a target price of 25.03 yuan (previous value: 23.14 yuan), maintaining a “buy” rating.
Comprehensive gross margin grew steadily, and the cost side remained stable
According to the company's 2024 quarterly report, the company's consolidated gross margin for 1Q24 was 21.5%, an increase of 0.6 pct over the previous year.
The cost side remained stable. The 1Q24 sales/management/R&D expense ratio was 2.5%/2.0%/8.7%, respectively, -0.1/+0.1/+0.4 pct year-on-year, respectively. 1Q24's other revenue increased 163% year-on-year to $0.3 billion, mainly due to increased levy and refund of software products and additional input tax credits.
Focusing on the high-quality large-particle market, the company is expected to seize the opportunities of the IoT era. In terms of product layout and market expansion strategies, the company focuses on high-quality high-granularity market segments such as vehicles, gateways, PCs, and POS. Through continuous R&D investment and customer service, it has built its own strong industry understanding and customer stickiness, and achieved a leading market position in the vertical industry. We believe that the company's automotive and FWA businesses are expected to continue their high growth trend in 2024; on the other hand, the company's PC, POS, and pan-IoT business demand is also expected to pick up steadily. In the long run, based on technology accumulation in the field of intelligent modules, the company is expected to seize the broad new opportunities brought by the edge computing market in the future. Among them, we believe that AIPC, outdoor robots and other markets are expected to contribute new performance increases to the company.
Maintain a “buy” rating
We maintained the company's net profit forecast for 2024 to 2026 at 726/920/1,101 million yuan, respectively. Comparatively, the company's 2024 Wind agreed to have an average PE value of 26x, giving the company 26 x PE for 24 years, corresponding to a target price of 25.03 yuan (previous value: 23.14 yuan), maintaining a “buy” rating.
Risk warning: risk of changes in industry policies, increased market competition, etc.