Incident: The company released its 2024Q1 quarterly report. 2024Q1 achieved revenue of 1,269 million yuan, +16.78% year on year, net profit to mother of 0.29 million yuan, +307.93% year on year, after deducting non-net profit of 190 million yuan, +445.19% year on year, gross profit margin of 11.31%, and -0.41 pct year on year.

The performance is growing rapidly, close to the forecast edge: the company's performance showed a trend not weak in the off-season. 2024Q1's revenue achieved double-digit growth, and profit increased sharply year over year, close to the forecast edge. The company's profitability has improved, mainly due to the increase in the share of high-margin products, combined with the company's cost reduction and efficiency measures. We are optimistic about the company's future growth space under AI/automotive multi-wheel drive.

AI speakers lead the card position, and car acoustics are successfully mass-produced: 1) AI speakers: The “ChatMini” AI speaker, jointly developed by the company and VIFA, was launched on the market in August 2023, and cooperation with domestic and foreign manufacturers equipped with large models of smart speakers continues. Research and development of various product types has been carried out, such as those with screens and emotional support functions. The company's leading card position in AI speakers is expected to help seize the opportunity in the AI speaker wave. 2) Automotive acoustics: The company has mass-produced some third-generation automotive platform projects for new power leader P customers, has prepared mass production preparations for NEV customers, and is actively promoting cooperation with many new energy/traditional car companies. The future automotive business is expected to grow rapidly, forming an important performance contribution.

Investment advice: The company's performance is growing rapidly, and AI speakers+car acoustics are expected to become an important driving force for growth.

We expect the company's 2024-2026 net profit to be 316/4.23/497 million yuan, EPS 0.56/0.74/0.87 yuan/share, corresponding PE of 23.59/17.65/15.02 times, maintaining the “increase” rating.

Risk warning: Risk of new product industrialization falling short of expectations; risk of automobile demand falling short of expectations; risk of falling consumer electronics demand; risk of exchange rate risk; risk of trade friction; risk of raw material supply and price fluctuations.