Incident: The company issued an announcement to grant 860 million shares of restricted shares to 8 incentive recipients who met the grant conditions at a grant price of 15.00 yuan/share on June 14.
Motivation targets are set to focus on evaluating the revenue and profits of new product lines, demonstrating confidence in development. The target of this incentive is the company's core technicians and core business leaders, with a total of 8 people, accounting for 2.22% of the company's total 360 employees (as of December 31, 2023). The company assesses product line performance of battery management chips, signal chain chips, and automotive lighting chips. Revenue targets for 2024/2025/2026/2027 are 500/3600/9500/175 million yuan, respectively, and gross profit targets are 225/1400/40,000/72 million yuan respectively. The company's incentive plan focuses on assessing the revenue and gross profit margin of the new product line, demonstrating the company's firm confidence in the development of new products.
Industry demand stabilized, and the company's profitability steadily recovered. In 2023, due to the global economic downturn, weak demand, and increased industry competition, semiconductor chip product prices continued to decline. Under the headwind environment, the company actively explores the market and digs deep into customer needs. Annual sales increased 26.72% year-on-year, and achieved revenue of 578 million yuan, +10.01% over the same period last year. Entering 2024, downstream demand gradually stabilized, prices for some chip products were also repaired, and the company's profitability improved month-on-month in 2024Q1. 2024Q1's gross margin was 26.59%, +4.15pcts year on year, +3.57pcts month on month; net profit margin was -6.43%, +1.32pcts year on year, +3.75pcts month on month.
The product portfolio continues to expand, and key downstream areas maintain a high growth rate. The company continues to invest in R&D in AC-DC, LED drivers, DC-DC, battery management, motor drives, signal chains, etc. With leading technical strength, reliable product quality and excellent customer service, the product share in the new consumer electronics, industrial control, network communication, data center and automotive electronics markets continues to grow, and the product structure continues to be optimized; among them, the company's revenue in the household appliances sector increased 58.04% year-on-year in 2023.
Investment advice: We expect the company's revenue for 2024/2025/2025/2026 to be 705/8.22/975 million yuan, respectively, and net profit to mother 0.07/0.27/0.46 billion yuan. The corresponding PE was 364.30/93.48/53.97 times, respectively, maintaining the “gain” rating.
Risk warning: New product development falls short of expectations; downstream demand falls short of expectations; industry competition intensifies.