The company announced that for the full year of 2023, it achieved operating income of 13.86 billion yuan, a year-on-year decrease of 2.59%; realized net profit to mother of 90.76 million yuan, a year-on-year decrease of 85.43%. The 24Q1 company achieved operating income of 3.95 billion yuan, an increase of 26.06% over the previous year; achieved net profit of 547.66 million yuan, turning a loss into a profit over the previous year.
In 2023, the company's net profit to mother decreased by 532 million yuan year on year, mainly due to weak downstream demand and the company's antenna, ODM, industrial intelligence, and intelligent solutions businesses still in the investment period, and related costs and expenses increased year on year. By product, in 2023, the company's revenue from products such as 2G, 3G, CatM, and LTE-A declined, 5G, automotive, and short-range products grew, and new businesses such as ODM and antennas grew rapidly. Non-recurring profits and losses are mainly investment income from foreign exchange hedging business and government subsidies. Q4 revenue and profit improved steadily month-on-month, and overall demand was still under pressure. Q4 achieved revenue of 3.89 billion yuan in a single quarter, up 12.72% month-on-month; gross margin/net margin were 20.42%/2.72%, respectively, +0.55%/-0.08% month-on-month. The decline in net interest rate was mainly due to the calculation of expenses and asset impairment losses.
Demand in the company's downstream IoT industry is gradually picking up, and the company continues to explore new business scenarios. New products and new businesses include automotive modules, 5G modules, smart modules, ODM, antennas, GNSS modules, etc.
The 24Q1 company's revenue increased slightly month-on-month. The gross margin was affected by increased market competition and changes in product structure. It fell 3.49 pcts month-on-month to 16.9%; net interest rate was 1.33%, down 1.39 pcts month-on-month. The cost reduction and efficiency effect was obvious. The sum of the four major cost rates in 24Q1 was 15.3%, down 7.2 pct/month over month, respectively.
Looking forward to the future, applications in the IoT field will continue to emerge, and technology will continue to be upgraded and iterated. AI application scenarios continue to be implemented, and the decline and deployment of large models at the edge side has increased the demand for intelligent computing power at the edge side, and promoted the evolution of the IoT module industry from digital transmission modules with a single functional dimension to intelligent modules. Innovation in new technology is expected to accelerate the accelerated iterative upgrading of terminals, and the rise of new hardware terminals such as smart cars, AI PCs, and AI PINs, leading to a recovery in overall demand and an increase in the added value of IoT modules.
Profit forecast: The company's net profit for 2024-2026 is estimated to be 4.6/7.1/980 million yuan, corresponding PE is 23/15/11 times, respectively, maintaining the “increase in holdings” rating.
Risk warning: demand recovery falls short of expectations; market competition deteriorates; investment costs continue to increase.