The automotive/mobile chip design project went smoothly and mass production orders resumed, predicting a 90% month-on-month increase in Q2 revenue.
The company forecasts revenue for the 24Q2 quarter of 0.61 billion yuan, a year-on-year decrease of 5.34% and a year-on-month increase of 91.87%.
The 24Q2 IP licensing business revenue is expected to be 0.182 billion yuan, up 43.91% month-on-month, of which IP licensing revenue is 0.158 billion yuan, an increase of 58.58% month-on-month.
The 24Q2 one-stop chip customization business revenue is estimated to be 0.427 billion yuan, up 123.44% month-on-month, of which chip design business revenue is 0.192 billion yuan, up 120.45% month-on-month, mainly benefiting from the smooth progress of projects such as 5nm autonomous driving master control chips from new car companies and AI ISP coprocessor chips from domestic mobile phone manufacturers; chip mass production revenue is 0.235 billion yuan, an increase of 126.18% month-on-month, mainly due to the resumption of mass production orders from customers.
The amount of orders in hand has increased sequentially for the third consecutive quarter since 23Q4, and the certainty of future revenue is high.
By the end of '23, the company had an order amount of 2.061 billion yuan, of which 1.807 billion yuan was converted within one year, accounting for about 88%. The company continues to explore incremental markets and emerging markets, expand leading customers in the industry, and sign new orders well. As of the end of 24Q1, the amount of orders in hand increased by 11.03% to 2.288 billion yuan at the end of 23. It is expected that orders in hand will continue to grow at the end of 24Q2, and future revenue certainty is high.
Customize 5nm smart driving chips for new domestic car companies to drive revenue growth in the automotive electronics sector.
24Q1's revenue in the automotive electronics sector increased 162.46% year over year, accounting for 22.41% of revenue (23H2 was 12.59%). By the end of '23, the company's IP had been licensed to more than 20 automotive electronics customers around the world. At the same time, the company has also launched the overall design process of the functional safety SoC platform and the ADAS functional safety solution based on this platform. It is cooperating in depth with a range of key customers in the automotive sector, including customizing 5nm high-performance smart driving system-level chips for well-known new domestic car companies.
More than 0.1 billion AI chips with integrated NPU IP have been shipped, continuing to help leading customers such as Microsoft apply AI.
The company's NPU IP can reach 400 TOPs after being expanded through multiple convolutional computing cores, and can be better used in the AI field. For example, in '23, the company joined hands with Microsoft to deploy the Windows 10 IoT enterprise operating system for IoT edge devices, and to provide video transcoding technology and 5nm one-stop chip customization services for data center acceleration cards of leading international chip companies. By the end of '23, the integrated company NPU IP had shipped more than 0.1 billion AI chips worldwide.
Domestic IP & ASIC unicorns embrace Chiplet's 100 billion market and maintain a “buy” rating.
The advent of AIGC such as ChatGPT marks an epoch-making moment for AI, and VeriSilicon is expected to fully benefit as the leading domestic IP &ASIC king. Net profit for 2024-2026 is expected to be 0.018/0.101/0.218 billion yuan respectively, corresponding to the 24/25/26 PE of 833.8/149.3/69.3 times, maintaining the “buy” rating.
Risk warning: International trade friction risk; technology licensing risk; intellectual property risk; technology upgrade iterative risk.