Nanxin Technology released its report for the first quarter of 2024: The company achieved revenue of 602 million yuan, YOY +110.68%, achieved net profit of 100 million yuan, YOY +224.79%, and achieved net profit of 100 million yuan without return to mother, and YOY +226.69%.
Key points of investment
Smartphone power management chips cover the entire link, and the value of stand-alone devices is increasing as the charging power of mobile phones and other consumer terminals is gradually increasing, and conventional 18W charging power is gradually being replaced by 33W. Against the backdrop that some high-end models and flagship models have introduced 200W or more charging power, the penetration rate and charging power of high-power charging continues to increase. As a leading manufacturer of charge pump charging management chips, the company is deeply involved in the traditional field of consumer electronics, and continues to launch more integrated and high-performance products in the field of mobile phone wired charging chips, which can achieve up to 300W fast charging power, further consolidating its leading position in the industry. Furthermore, through application scenarios, the company improved the product layout of the overall smartphone charging link to achieve full coverage of wired charging, wireless charging, screen driver chips, and lithium battery protection chips. At the same time, with the help of wired charging chips, in-depth cooperation has been reached with mainstream domestic mobile phone manufacturers to actively promote the introduction of other product lines in the mobile phone field and increase the stand-alone value of the company's products in mobile phones.
Actively expanding the non-consumer electronics sector, automotive electronic chips have made significant progress. In 2023, the company achieved revenue of 306.41 million yuan, YOY +89.02% in the automotive electronics field, and introduced products to many well-known leading customers in the industry. The company moved from in-vehicle wireless wired charging to leading automotive manufacturers. With rapid iteration and continuous innovation capabilities, the company continues to expand the layout of new categories and carry out product layout planning in the fields of automotive instruments, smart cockpits, ADAS and BMS. The company's USB and wireless charging solutions have achieved large-scale mass production on the client; new products such as high-performance DC-DC power chips, HSD chips, and e-Fuse chips have achieved large-scale sample delivery on the client, and some customers have already entered the targeted design stage of the project. Furthermore, in order to expand its business in the non-consumer electronics sector, the company continues to enrich its product matrix and plans to achieve an end-to-end product layout in the industrial field; actively expand the market application of products in the industrial field, achieve certain results in the fields of energy storage, drones, power tools, communications, etc., and is expected to be further introduced into fields such as industrial power supplies and AI Power in the future.
Continue to increase investment in R&D and lay out future long-term growth momentum
2024Q1's R&D expenses were 90 million yuan, YOY +58.56%, and investment in R&D personnel remuneration and R&D materials increased significantly over the same period last year. By the end of 2023, the number of R&D personnel in the company had increased to 378, YOY +32.17%, and the number of R&D personnel accounted for 65.40% of the company. In 2023, the company obtained 29 new authorized invention patents, and obtained a total of 89 patents, all of which are invention patents. Seven core technologies have been added, all independently developed, namely lithium battery monitoring technology, zero-voltage switch charge pump control technology, low voltage autostart technology, soft switch Flyback technology with fully integrated secondary control, Smart High Side Driver technology, automotive-grade smart fuse technology, and automotive antenna LDO technology, and all of these technologies have been applied to the company's products.
Profit forecasting
It is predicted that the company's revenue for 2024-2026 will be 23.87, 31.01, and 38.56 billion yuan, and EPS will be 0.89, 1.21, and 1.51 yuan, respectively. The current stock price corresponding to PE is 37.7, 27.6, and 22.2 times, respectively. As a leading manufacturer of mobile phone charge pump charging management chips, the company has a rich product structure, continuously introduces various new products to customers, and actively lays out automotive electronics and other fields. It has broad development prospects and coverage for the first time, giving it an “increase in wealth” 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.