Event: The company released its 2023 annual report and 24Q1 quarterly report:
1) 2023: Revenue of 5.17 billion yuan, +15.8% year on year; net profit to mother of 440 million yuan, +0.8% year on year; net profit after deducting non-return to mother 360 million yuan, -14.3% year on year. The gross profit margin was 22.3%, +0.5pct year over year.
2) 23Q4: Revenue of 16.1 billion yuan, +43.7% YoY, +3.5% YoY; net profit to mother of 90,000,000 yuan, +63.6% YoY, -30.7% month-on-month; net profit without return to mother of 70,000 yuan, +39.2% YoY, -38.7% YoY. Gross profit margin 21.5%, -3.5pct year over year, -0.2pct month-on-month.
3) 24Q1: Revenue of 1.36 billion yuan, +51.1% year over month, -15.1% month on month; net profit to mother of 120 million yuan, +37.7% year on month, +32.7% month on month; net profit without return to mother of 100 million yuan, +39.6% year on month, +46.3% month on month. Gross profit margin 22.1%, -2.3 pct year over year, +0.6 pct month-on-month.
Demand for consumer electronics is picking up, and charger power continues to rise: Global demand for consumer electronics, represented by mobile phones and PCs, is picking up as the switching cycle brings an inflection point and AI enables a better user experience. Global smartphone shipments reached 289 million units in 24Q1, +7.8% year over year; global PC shipments reached 57.2 million units, +3.2% year over year. By the end of 2023, the maximum charging power of the phone's standard charger had reached 240W, and the maximum wireless charging power had been raised to 80W.
The company continues to increase the supply share of non-major customers and continues to upgrade products as the mobile phone market gradually recovers. The average ASP is expected to continue to rise.
Demand for server power supplies is growing rapidly, and the company has realized the supply of AI servers: in the AI era, demand for servers as basic computing power equipment is growing rapidly. The company is actively developing data center server power supplies and has completed mass production and development of 2000W mainstream server power supplies and 2000W server backplane power supplies; CRPS server power supplies have been formed into serial products (550W/800W/1300W/1600W/2000W); high-power server power supplies are used in AI servers; and CRPS server power supplies The matching PDB server backplane power supplies have also been delivered in bulk quantities.
Actively promoting the PC power supply business, leading laptop customers are expected to bring in new volume: the company is currently cooperating with leading laptop customers, and the implementation of new projects in the future is expected to bring in additional volume. In addition, mobile phone manufacturers have successively launched laptop products to strengthen ecological interconnection. The company uses the original mobile charger supply advantages to support customer-related products and continues to strengthen the PC sector layout.
Investment advice: Since downstream demand is still recovering slowly, we have adjusted our profit forecast appropriately. We expect the company's net profit to be 6.0/8.0/950 million yuan in 2024-26 (previously equivalent to 70/90 million yuan in 2024-25), corresponding PE is 15/12/10 times, maintaining the “buy” rating.
Risk warning: The introduction of new products falls short of expectations, the recovery in downstream demand falls short of expectations, and the risk that the information used in the research report is not updated in a timely manner.