Key points of investment
Event: The company released the 2024 mid-year performance forecast. 24H1, the company expects to achieve revenue of 2.62-2.72 billion yuan, a year-on-year increase of 28%-33%; net profit to mother of 1.34-1.39 billion yuan, up 30%-35% year on year, higher than our previous forecast of 1.27-1.31 billion yuan, up 23%-27% year on year; net profit without deducting net profit of 1.23-1.28 billion yuan, up 36%-42% year on year.
The company continued its high growth rate in Q2, and the inflection point logic of operations was confirmed once again. In 24Q2, the company expects to achieve revenue of 1.45-1.55 billion yuan, a year-on-year increase of 26%-35%; net profit to mother of 0.77-0.82 billion yuan, an increase of 27%-35% year-on-year.
Based on the median performance forecast, 24Q2 revenue is expected to be +29%, net profit to mother +31% year over year, 24Q1 revenue +31% year over year, and net profit to mother +34% year over year.
Export boom continues, business inflection points continue to be verified
The revenue of desktop communication terminals in 23 years was 2.544 billion yuan, -19% year-on-year, accounting for 59%, with a gross profit margin of 67.40%, mainly due to the inventory cycle and pressure on industry demand. Currently, inventory levels tend to be benign and manageable, and downstream demand continues to improve marginally. According to the General Administration of Customs, Fujian IP phone export sales in January-May were +17% year-on-year, which was significantly better than our previous expectations. As a result, we raised our growth forecast for desktop communication terminals. It is expected that desktop communication terminals 24 will maintain good double-digit growth throughout the year. The previous forecast was single-digit growth.
The revenue of conference products in '23 was 1.466 billion yuan, +13% year-on-year, accounting for 34%. The gross profit margin was 65.76%, up 1.07pp year-on-year, and the inventory phase ended in the second half of '23. We expect conference products to continue to grow rapidly, the growth rate is expected to remain unchanged, and the growth rate is expected to reach more than 30% for the whole year of 24.
Cloud office terminals had revenue of 0.323 billion yuan in 23 years, -10% year-on-year, accounting for 7%, gross profit margin of 53.90%, and positive feedback on new products in the second half of '23. In '23, the company completed the iterative upgrade of BH series business Bluetooth headsets and achieved good channel verification results. We expect 24Q1 cloud office terminals to grow significantly, and the growth rate is expected to be over 50% throughout the year.
2024 equity incentive target revenue/profit +20% YoY, business partner incentive target revenue +30% 2024 equity incentive target revenue/profit +20% YoY. In April 24, the company issued the 2024 Restricted Stock Incentive Plan implementation assessment management measures. According to the equity incentive target, based on 2023 revenue and net profit, the 2024-2025 revenue and net profit growth rate will not be less than 20%/40%.
The 2024 Business Partner Incentive Target Revenue +30% YoY. The company released the Business Partner Incentive Fund Plan in June '21. The first operating cycle is for the five fiscal years 2021-2025. The performance conditions required to withdraw the incentive fund are that the year-on-year revenue growth rate of the company's consolidated statements is not less than 30% (including capital). Reviewing the past, the company completed the business partner incentive target in 2022, but not in 2023.
The company's 24H1 performance is outstanding, and more than half of the incentive targets have been achieved. According to the median performance forecast, 24H1 revenue was +30% YoY, net profit to mother +32% YoY, and revenue and profit met 51%/57% of the equity incentive target, respectively. Therefore, we believe that the company is expected to meet the 20% equity incentive target and challenge the 30% growth rate business partner plan.
Profit forecasting
Since the company's overall 24H1 performance exceeded expectations, and phone export demand was significantly higher than previously anticipated, we raised our profit forecast. The company's net profit for 24-26 is estimated to be 2.52, 2.93, and 3.4 billion yuan, respectively, +25.4%, 16.3%, and 16.0% year-on-year, respectively. Corresponding to 24-26 PE is 19, 17, and 14 times, respectively, maintaining a “buy” rating.
Risk warning
Exchange rate fluctuations exceeded expectations, prices of upstream raw materials fluctuated; industry competition increased risks, etc.