The company's domestic and international demand continues to recover, sub-new products are being released rapidly, and new applications and customers are constantly increasing. The company has entered a normal replenishment cycle. Revenue in May 2024 reached a record high, and the January-May performance grew at a high year-on-year rate. It is anticipated that many new products will be released one after another in 2025, and the company's revenue and profit are expected to continue to grow, maintaining the “maintenance” rating.
Revenue in May reached a record high, and January-May results showed a high year-on-year increase. From January to May 2024, the company expects to achieve net profit of 118.7 million yuan, +123.5% year on year; after deducting non-net profit of 118 million yuan, +172.9% year on year; based on this, it is estimated that the company will achieve net profit to mother of 65 million yuan in April-May, +194% year over year, and 70 million yuan in non-net profit, +293% year over year. The company's January-May performance improved markedly year-on-year, and growth accelerated further since Q2, mainly because ① B-side performance achieved a new breakthrough, and the main increase in customer contributions in 2023-2024. The monthly revenue in May reached a record high, and revenue growth mainly came from new categories such as S3/C2/C3; ② the scale effect increased. The company's January-May expenses mainly came from R&D investment, and the annual budget controlled growth rate within 20%. The revenue growth rate was higher than the cost growth rate, while the gross margin remained stable at 40%.
The company began an active inventory replenishment cycle, and revenue is expected to grow quarterly in 2024. As of 24Q1, the company's inventory was 283 million yuan, an increase of 40 million yuan over the previous month. The company develops new businesses and brings rapid downstream demand growth. The company believes that the inventory level at the end of 24Q1 was lower than expected, and began actively replenishing inventory in Q2. Due to good demand at home and abroad in 24Q2, the company's revenue grew relatively well year on month. May revenue hit a record high in a single month, and revenue is expected to increase quarterly in 2024.
Subsequent new products will continue to be released, and many new products will enter a period of rapid growth in 2025. The company continues to rapidly release new categories such as C3/C2/S3, and all new products other than C5 will enter a period of rapid growth in 2025. Among them, C6 has now begun to contribute revenue and is in a state of high growth. It is expected to enter the second new category at the end of the year; H2 has already been mass-produced, and relies more on the development of Matter. Matter recently released version 1.3, and mass official shipments are expected to begin in the second half of the year. The H series is expected to achieve rapid growth in 2025; the P4 is expected to begin retail sales in early July, and growth is expected to improve next year; the C5 product is expected to begin sample delivery within the year, and small-batch production on the client side will begin next year.
Investment advice. The company's domestic and international demand continues to recover, sub-new products are being released rapidly, and new applications and customers are constantly increasing. The company entered a normal replenishment cycle. The May revenue reached a record high, and the January-May performance grew at a high year-on-year rate.
Based on the company's performance forecast, we revised the 2024/2025/2026 revenue to 19.1/24.5/3.01 billion yuan, and the 2024/2025/2026 net profit to mother was revised to 31/4.1/540 million yuan, corresponding PE was 36.4/26.8/20.7 times, maintaining the “increase in holdings” investment rating.
Risk warning: Risk of market recovery falling short of expectations, increased market competition, technology updates, and R&D progress falling short of expectations.