Core views:

Revenue grew steadily in 24Q1. The company released an annual report and quarterly report. In '23, it achieved operating income of 1,072 million yuan, +1.10% year-on-year; realized net profit to mother of 312 million yuan, +20.11% year-on-year.

24Q1 achieved operating income of 248 million yuan in a single quarter, +12.89% year over year; realized net profit of 43 million yuan, or -23.13% year over year, mainly due to significant non-recurring profit and loss in 23Q1. Net profit from 24Q1 after deducting non-return to mother was 39 million yuan, +21.29% year over year.

Gross profit margin has increased for three consecutive years, and the scale effect is becoming more and more prominent. The company's gross profit margin in '23 was 43.05%, +2.81 pct year over year. Net profit margin for '23 was 31.27%, +5.28pct year over year. 24Q1 gross margin was 43.36% and 20.30%, respectively, +2.58pct and -6.21pct, year-over-year, respectively.

Actively acquire and acquire to accelerate the transition to a platform-based enterprise integrating multiple physical sensors. The company draws on the experience of overseas leaders and accelerates the transformation from a single leader to a platform-based enterprise by holding 2-3 main businesses and participating in 3-4 shares every year. Currently, the company has three investment centers in Ningbo, Shenzhen and Zhengzhou, and has invested in the company's business involving multiple physical sensors such as optoelectronics, current, and gas. Compared with the revenue scale of overseas leaders of nearly 100 billion dollars, the company has broad room for future growth.

Accelerate the deployment of humanoid robot sensors and open up a new curve of company growth. According to the annual report, the company's torque sensors have tested products and sent samples to several domestic manufacturers, and will soon lay out olfactory and tactile robot sensors. The company develops six-dimensional force sensors for industrial robots and collaborative robots, breaking through in the direction of low cost, low power consumption, low deformation, and small size, from resistance strain gauges to semiconductor silicon wafers. In the first half of '24, the company accelerated the digital six-dimensional force sensor project jointly developed with its subsidiary on the basis of the analog six-dimensional force sensor that had already been tested earlier.

Profit forecasting and investment advice. We expect the company's net profit to be 3.80/4.68/550 million yuan in 2024-2026. Referring to comparable company valuations, the company was given a valuation of 28xPE in 2024, corresponding to a reasonable value of 37.71 yuan/share, maintaining a “buy” rating.

Risk warning. Macroeconomic risks; risks of changes in industry policies; risks of increased market competition.