The company achieved operating income of 21 billion yuan in 23, an increase of about 5% over the previous year; net profit to mother was 556 million yuan, a year-on-year decrease of 44%; net profit after deducting non-return to mother was 138 million yuan, an increase of about 44% over the previous year. 24Q1 achieved revenue of 5.64 billion yuan, up 30% year on year; net profit to mother was 558 million yuan, up about 181% year on year; net profit after deducting non-return to mother was 566 million yuan, a sharp increase of 2477% year on year.
Market recovery and mass production and delivery of new products drive revenue growth in mobile CIS. Benefiting from the smooth progress of downstream inventory removal in the smartphone market, the company's mobile CIS revenue in '23 was about 7.78 billion yuan, an increase of 44% over the previous year, showing a clear improvement trend. According to the TechInsights report, demand for CIS products with large pixel sizes and larger optical formats in the smartphone market is increasing. The company's new CIS product OV50H was mass-produced and delivered in 23Q3, using PureCel Plus-S chip stacking technology to better meet customer needs; 50 megapixel products and above accounted for 60% of revenue in '23.
The automotive CIS has broad prospects, and the CIS business of security and laptop computers is expected to resume. Benefiting from the company's continued penetration of autonomous driving applications in the automobile market, the company's revenue from the automobile market increased to 4.55 billion yuan in '23, an increase of 25% over the previous year, and its market share increased rapidly. Affected by weak market demand in '23, the company's revenue from the security and laptop markets fell to about 1,72/534 billion yuan respectively. With the recovery of the security monitoring market, mass production of newly launched machine vision products, the return of downstream inventory levels in the laptop market, and the introduction of AI-PC, the company's performance is expected to improve.
The market share of touch and display solutions increased, and analog solutions continued to be developed. The company's touch and display solutions cover various products such as LCD-TDDI, OLED Driver IC, TED, etc. In 23, shipments of touch and display chips reached 133 million units, an increase of 65% over the previous year, and the market share increased significantly. The company continues to develop its simulation solutions market, expanding from the consumer and industrial markets to the automotive market. The company completed the acquisition of Xinlite in '23 and expanded its automotive analog chip R&D team. Excluding the impact of the divestiture of the product line in '22, the revenue from analog solutions increased 13% year-on-year in '23. The company will continue to promote the product layout of automotive analog chips and promote the verification and introduction of products such as CAN/LIN, SerDes, PMIC, and SBC.
We forecast that the company's net profit for 24-26 will be 25.4 billion yuan, 35.1, and 4.55 billion yuan, respectively (the original 24-25 forecast was 2.42 billion yuan and 3.08 billion yuan, mainly adjusted for revenue and expense ratios). Based on the 24-year average PE valuation of comparable companies, a target price of 117.04 yuan was given to maintain the purchase rating.
Risk warning
Downstream market recovery falls short of expectations; high-end CIS shipments fall short of expectations; automotive business progress falls short of expectations.