Incident: On April 30, the company released its 2024 quarterly report. The main financial performance for the first quarter was as follows: revenue of 123 million yuan, +205.9% year over month; net profit to mother - 48.89 million yuan, a year-on-year loss, mainly due to profit and loss of 138 million yuan from 23Q1 equity transfers and technology licensing transactions, narrowing month-on-month losses; gross profit margin of 32.5%, -11.1% year over year, +2.8 pcts month-on-month. Gross margin declined significantly, mainly due to market conditions and industry inventory removal. Competition in the analog chip market is intense, and sales prices for some products have declined.
Q1 Revenue increased year-on-year, and losses narrowed month-on-month. The company's 24Q1 revenue is calculated on a net basis (since the voice coil motor driver chip business has not been completely transferred to its own supply chain, the total sales amount cannot be calculated in the financial statements). The 24Q1 financial report revenue was 123 million yuan, +205.9% year over year, and 265 million yuan in terms of shipment value, +560.4% year over year, showing high year-on-year growth. Among them, the Q1 shipping amount for voice coil motor driver chips was 160 million yuan, and the company's related product revenue growth was high. The company's net profit for 24Q1 was -48.89 million yuan. Compared with -70.32 million yuan in 23Q4, the loss margin narrowed, mainly due to a month-on-month recovery in gross margin in 24Q1 and a month-on-month decrease in asset impairment losses due to falling inventory prices.
Continue to maintain a high level of investment in R&D. By the end of 2023, the company had 184 public R&D personnel, accounting for 64.34% of the total number of employees. The number of R&D personnel increased by 39.39% year-on-year. Among them, 17 R&D personnel had doctorate degrees and 60 had master's degrees, accounting for 41.85% of the total number of R&D personnel. The company's 24Q1 R&D expenses were 58.36 million yuan, accounting for 47.5% of revenue. Experienced R&D engineers are a scarce resource for analog IC companies, which is reflected in many aspects such as the success rate of the first version of the product. The company's core technical team members all have deep semiconductor industry backgrounds, and continuous high R&D investment provides strong support for new product expansion and product upgrading.
With endogenous and epitaxial extensions, voice coil motor driver chips have become an important growth curve. In terms of its own product line, the company continues to launch new high-performance products: 1) In terms of power management chips, in 2023, the company launched a new ultra-low quiescent current DC/DC chip with ultra-low power consumption and compact package, launched a high-efficiency high-current charge pump charging chip product with excellent conversion efficiency and a smaller PCB area. In February 2024, the HL7603, an industry-leading DC/DC chip for silicon anode lithium-ion batteries was launched to support the long battery life of AI phones; 2) In terms of port protection and switching chips, the company launched in 2023 with high voltage New USB Type-C analog audio switch products, etc. with protective functions can realize the three-in-one transmission function of USB 2.0 signals, analog audio, and microphone signals. In terms of epitaxial expansion, in December 2022, the company obtained exclusive use rights for autofocus and optical image stabilization from Korea Transportation in Greater China. In 2023, voice coil motor driver chips related to autofocus and optical image stabilization technology achieved a shipment value of about 250 million yuan, and 24Q1 achieved a shipment value of 160 million yuan. The products have entered the supply chain of mainstream consumer electronics customers such as Vivo, Honor, Transmission, OPPO, Xiaomi, and Lenovo.
Investment advice: Due to the short-term impact of high R&D investment and industry competition on gross margin, the company's profit is temporarily pressured, and the early profit forecast is adjusted appropriately. The company's net profit for 2024-2026 is -1.58/-0.37/+ 134 million yuan (previously predicted to be 0.55/ 197 million yuan in 2024/2025), and the 2024/5/9 closing price corresponding PE is -30/-128/+35 times, but the company's 24Q1 shipping revenue has reached 265 million yuan, until the voice coil motor driver chip is transferred to After owning one's own supply chain, revenue can be recognized in full according to the shipping amount. According to financial statements, revenue is expected to increase dramatically, and to narrow losses and thus achieve profit. Maintain a “buy” rating.
Risk warning events: downstream sentiment recovery falls short of expectations; risk of macro-environmental fluctuations