Key points of investment
The industry gradually picked up, and Q1 performance recovered
In 2023, the company achieved revenue of 144 million yuan, or -48.96% year-on-year, and net profit to mother of 19 million yuan, -80.58% year-on-year. Gross margin was 41.88%, -20.02pct year over year.
In 24Q1, the company achieved revenue of 60 million yuan, +72.33% YoY, +17.28% month-on-month, net profit to mother of 111 million yuan, -11.06% YoY, turning a loss into profit. Net profit after deducting non-return to mother was 0.1 billion yuan, +109.72% YoY, mainly due to the significant recovery of the optical chip industry compared to 2023, and the further expansion of EML products.
The telecom market is gradually recovering and actively promoting the release of digital communication products
In the telecommunications market, the company's revenue in 2023 was 133 million yuan, or -43.83%. The main reason is that the telecom market was affected by the slowdown in downstream customer inventory and terminal operator construction. Revenue from the telecom market business declined sharply. At the same time, price competition for some products in the domestic market was becoming more intense, and the product structure of sales was changed, causing the gross margin level to decline. Facing the challenge of downstream demand pressure, the company faced market pressure. Through continuous expansion of key customers and key products such as 10G EML, the company's revenue showed a trend of month-on-month improvement from 23Q4.
The data center and other businesses achieved revenue of 4.713,800 yuan, -89.47% year-on-year. The data center market is polarized. On the one hand, demand in the traditional cloud computing sector has declined due to macroeconomic and technological developments. Affected by this, revenue from the company's data center and other businesses declined sharply. On the other hand, the explosion in the field of artificial intelligence has greatly boosted the demand for high-speed optical modules such as 400G and 800G. The company seizes market opportunities and has tested 100G PAM4 EML, CW light sources and other products to many customers at home and abroad. Currently, related tests are progressing smoothly.
Increase investment in R&D to create core technical advantages
In 2023, the company spent 31 million yuan on R&D, an increase of 14.23% over the previous year, and continued to increase investment in high-speed high-power optical chip products. In the field of optical fiber access, 10G DFB products with differentiated solutions have been developed and tested to customers, and 10G EML products have been continuously optimized and upgraded. Develop and test related ONU and OLT end optical chip products to customers for next-generation 25G/50G PON optical fiber networks. In the data center field, 100G PAM4EML, 70mW/100mW high-power CW chips have completed product development, design and finalization, and sample testing on the client side. In higher speed application scenarios, the company initially completed performance development and in-factory testing of 200G PAM4 EML, and the product continued to be optimized.
Profit forecasting and valuation
The company is a scarce domestic supplier of laser chips. Telecom product lines are picking up, and new digital communication products are being introduced at an accelerated pace. We estimate that the company's net profit for 2024-2026 will be 74 million yuan/118 million yuan/176 million yuan, corresponding to a PE of 110X in 25. Considering the company's leading progress in the industry, various digital communication products are expected to expand, and a purchase rating is given.
Risk warning
Development or new product progress falls short of expectations; market competition worsens