According to Wang Shengyang, the chairman and general manager of the company, in the earnings conference held by Naxinwei today (****is year the company will continue to consolidate and expand its market share in core markets such as automotive electronics and general energy, while exploring new market opportunities and realizing breakthroughs for top customers in areas such as body electronics, thermal management, and intelligent cabins.

It is understood that in the past year, Naxinwei's product prices have been under overall pressure due to market competition and weakened downstream demand. Although sales volume rose year-on-year, operating income decreased year-on-year. Financial report data shows that in 2023, the company achieved operating income of 1.311 billion yuan, a decrease of 21.52% over the same period last year; net profit attributable to shareholders of the listed company was -305 million yuan, a decrease of 221.85% year-on-year.

Naxinwei stated that the overall demand for automotive electronics in 2023 will continue to grow steadily, while the consumer electronics industry will improve, but the industrial market and the photovoltaic and energy storage markets are still in the destocking and gradually recovering stage. However, Naxinwei did not respond to investors' questions about changes in market demand and industry inventory since the second quarter of this year during the performance conference.

According to the company's response to investment institutions' research in April of this year, it appears that most downstream industries have almost depleted their inventories. The first industry to recover from the inventory impact was the consumer electronics industry, followed by the automotive and industrial markets. Currently, the photovoltaic and energy storage sectors are still clearly affected by inventory issues, with the light and energy storage markets possibly recovering in the second half of this year.

Naxinwei's quarterly revenue has achieved continuous quarter-on-quarter growth for three consecutive quarters. In the first quarter of this year, the company achieved operating income of 362 million yuan, a quarter-on-quarter increase of 16.89%.

However, regarding the issue of when the price of analog chips will bottom out, Naxinwei revealed at the performance briefing for investment institutions in April of this year that due to the relatively aggressive expansion of the analog chip industry in recent years, the fiercely competitive market situation may continue for quite some time.

The company states that it is actively matching pricing strategies to stabilize or increase market share. "In the longer term, the company will continue to improve its core capabilities, such as cost control, to enhance operational efficiency and face market competition while also actively planning more differentiated and innovative products."

Regarding new product R&D and mass production plans for this year, the company reported that it will gradually launch new products, including magnetic angle and magnetic switch sensors, and expects magnetic wheel speed sensors to contribute to revenue growth in the future. The pressure sensor products for measuring water levels in consumer electronics products is currently in the research stage, and the company is also planning to develop side impact pressure sensor products for automobiles in the future. Regarding signal chains, the company's automotive thermal management processor chip products began to contribute to revenue this year, and in the future, new products will be planned successively in the field of dedicated SoCs. More new products for general signal chains will be launched successively, and the company's important direction under the interface category will be video and audio related interface products for vehicles. In terms of power management, the company will continue to enrich its products related to motor drive for cars, and its first high-side switch product will soon be mass produced. The company will continue to develop more specifications and models of products in the high-side switch market to quickly complete this product direction.

Naxinwei has set up branches in key areas such as Japan, South Korea, and Germany, completed the construction of an overseas sales team, and attempted to expand its overseas market share. During the reporting period, the proportion of overseas income of the company was 12.35%, an increase of approximately 2.2 percentage points from the previous year.

In July 2023, Naxinwei announced its plan to acquire KunTeng Micro's equity in a cash transaction. In the same year, in August, Naxinwei announced that it had signed an 'intention agreement' with 30 shareholders of KunTeng Micro and planned to acquire 67.60% of KunTeng Micro's equity held by these 30 shareholders through cash. However, there have been no further disclosures about the progress of the share acquisition project in the past year. During today's (June 4) earnings conference, investors asked Naxinwei's chairman about the latest situation regarding the aforementioned matters, but the company did not make a positive response or explanation.

"Star"

Please refer to the previous explanation for the translation of the text in section 1.

In addition to acquiring Kunten Micro Simulation Chip Manufacturer, Naixianwei's external investment actions are frequent in 2023. According to Wang Shengyang, the company's internal industrial investment business is mainly carried out by its subsidiary Suzhou Naxing. In 2023, it has established cooperative funds with well-known investment institutions in the industry such as Yuanhe, Huaye, Suzhou Juyuan, and Xiaomi, and has invested in more than 70 projects related to the integrated circuit, semiconductor, and upstream and downstream industries. It is understood that the company also invested nearly 100 million yuan in industrial investment with Hemai Stock last year, jointly investing with Zhongrui Hongxin, a silicon carbide device merchant.

Wang Shengyang said that this year the company will continue to layout through external investment, seeking high-quality acquisition targets, and looking forward to quickly expanding product categories and market directions through the effective integration of industry resources during the industry's downturn window.