Tiande Yu's 2024Q1 revenue was 345 million yuan, YoY +46%; gross profit margin was 19.6%, YOY-0.8pcts, and the year-on-year pressure was still under pressure. The company successfully developed AMOLED DDIC, tablet TDDI, and four-color electronic price tag driver chips for mobile phones, which is expected to drive a new round of growth. Maintain an increase in holdings rating.
Key points to support ratings
Tiandeyu's 2024Q1 revenue resumed year-on-year growth, and gross margin has yet to be repaired. Tiande Yu's 2023Q4 revenue was 383 million yuan, QoQ +18%, YoY +50%; gross profit margin 20.0%, QoQ +1.6 pcts, YoY+8.2 pcts; net profit after deducting non-return to mother of 31 million yuan, QoQ +10%, turning a year-on-year loss into profit.
Tiande Yu 2024Q1 revenue of 345 million yuan, QoQ -10%, YoY +46%; gross profit margin 19.6%, QoQ-0.4pcts, YoY-0.8pcts; net profit after deducting non-return to mother of $0.24 billion, QoQ -22%, YoY +133%.
Display drivers contribute the main revenue, and electronic price tag driver chips are under pressure. Looking at the product structure, Tiandeyu's mobile smart terminal display chip revenue in 2023 was 992 million yuan, YoY +7%; electronic price tag driver chip revenue was 136 million yuan, YoY -37%; fast charge protocol chip revenue was 40 million yuan, YoY +6%; and camera voice coil motor driver chip revenue was 28 million yuan, YoY +121%.
Smartphone AMOLED DDIC, tablet TDDI, and four-color electronic price tags have successfully broken through. In 2023, the company successfully developed AMOLED mobile phone chips, laying the foundation for the next step in customer introduction. The company has also mass-produced and shipped display driver chips for tablet TDDI that support active pens. The company is also the first mass producer in the industry to implement a four-color electronic price tag driver chip in the field of electronic price tags, which is expected to further enhance the company's market competitiveness in this field.
valuations
Tiandeyu's 2024/2025/2026 EPS is expected to be 0.34/0.55/ 0.68 yuan respectively. By the close of April 30, 2024, Tiandeyu's total market value was about 5.6 billion yuan, corresponding to 2024/2025/2026 PE 40.4/25.3/20.2 times, respectively. Considering that the 2023 DDIC price war had a negative impact on the profitability of the industry and that the company's 2024Q1 gross margin was not significantly recovered, we lowered the company's profit forecast for 2024. Maintain an increase in holdings rating.
The main risks faced by ratings
Market demand fell short of expectations. The competitive landscape in the industry has deteriorated. New technology research and development progress falls short of expectations.