Lixin Micro released its report for the first quarter of 2024: The company achieved revenue of 220 million yuan in Q1 of 2024, an increase of 23.57%; realized net profit of 53.477 million yuan, an increase of 93.35% over the previous year; realized net profit deducted from non-mother of 505.686 million yuan, an increase of 113.38% year on year.

Key points of investment

Q1 Consumer electronics structural recovery, driven by increased customer demand, revenue for each quarter of 2023 was 178 million yuan, 195 million yuan, 262 million yuan, and 255 million yuan, respectively. In the first quarter of 2024, with the structural recovery of the global consumer electronics market, demand for the company's products increased further, and the introduction of new products was good, which led to an increase in sales volume and achieved revenue of 220 million yuan, an increase of 23.57% over the previous year. At present, the company's terminal customers have covered well-known domestic and foreign consumer electronics brands such as Samsung, Xiaomi, LG, Wingtech, Haier, etc., and through repeated verification and testing of the products, the products have a high customer certification barrier, forming a good customer advantage.

The share of R&D investment remains high. The company continues to expand production and improve the product line. Based on the idea that R&D innovation is the cornerstone of development, the company continuously and systematically promotes the company's independent R&D and maintains a high level of R&D investment. The total R&D investment in the past two years has accounted for more than 10% of revenue. By the end of 2023, the company had obtained a total of 148 intellectual property project authorizations. In Q1 2024, the company launched the ET3565 ultra-low internal resistance load switch to control timing and reduce power consumption by selecting IN/OUT bidirectional power supply; the ET4557 level conversion chip for the SIM card interface has a dual power supply design, where the power supply voltage on the host processor side is 1.08V to 1.98V, and the power supply voltage on the SIM card side is 1.62V to 3.6V. It includes three-channel level conversion to convert the I/O, RST, and CLK signals of the SIM card to achieve communication between the host platform and the SIM card, and successfully entered the Qualcomm (Qualcomm) middle and high-end platform reference design to obtain the highest recommended level (GOLD). The company continues to expand and improve its product line in categories such as high-performance and high-reliability power management chips, signal chain chips, and high-precision Hall chips to meet the diversified needs of the market and form strong competitiveness.

Deeply involved in the consumer electronics market, closely serving mainstream brand supplier companies, continued to deeply cultivate the consumer electronics market, actively expand in industrial control, medical electronics, automotive electronics, network communications, etc., and achieved certain sales results. The market pattern in the consumer electronics sector, especially the mobile phone sector, is highly concentrated. The company officially entered Samsung Electronics' supplier system in 2010, formed excellent R&D capabilities and a strict quality control system based on the quality requirements of international customers, and passed supplier certification for mainstream consumer electronics brands such as Xiaomi, LG, and Wingtech. In the consumer electronics power management chip segment, the company has strong competitiveness, has established considerable brand influence, and is a major domestic power management chip supplier. The performance indicators of the company's power conversion chips and power protection chip products have reached or surpassed international and domestic bidding products. At the same time, the company is committed to expanding its global business. In 2023, the company established a wholly-owned subsidiary in Korea to serve the Korean market more closely, including Samsung Electronics, a key customer.

Profit forecasting

It is predicted that the company's revenue for 2024-2026 will be 11.09 billion yuan, 13.57 billion yuan, and the EPS will be 2.06, 2.63, and 3.15 yuan respectively. The current stock price is 20.0, 15.6, and 13.1 times PE, respectively. The company is deeply involved in the consumer electronics sector, has established considerable brand influence in the power management chip market segment, and entered the mainstream consumer electronics brand supplier system for the first time, providing an “increase in weight” investment rating.

Risk warning

Macroeconomic risks, risk of product development falling short of expectations, risk of increased industry competition, risk of downstream demand falling short of expectations.