The performance improved quarter by quarter, and 24Q2 revenue and profit both exceeded expectations. The company announced that the semi-annual report revenue was 2.4-2.5 billion yuan, a year-on-year increase of 124%-133%; net profit to mother was 0.135-0.155 billion yuan, reversing the year-on-year loss; net profit not to mother was 0.1375-0.1575 billion yuan, and equity incentive expenses of 63.1 million yuan were incurred during the interim reporting period. The company's revenue for the second quarter is expected to be 1.56-1.66 billion yuan, net profit to mother 0.121-0.141 billion yuan, and a net profit margin of 8%.
The mobile phone market successfully opened a second growth curve. According to the semi-annual report forecast, in the smartphone sector, the company's shipments of high-end 50 million pixel products used in flagship mobile phone main cameras, wide-angle, and telephoto lenses have risen sharply. In particular, mass production of various XS series products has led to a significant increase in revenue in the smartphone sector. At the same time, cooperation with customers has deepened comprehensively, and the market share continues to increase. Currently, it has successfully opened up a second growth curve in the smartphone field.
High-end mobile phone products accelerate large-scale mass production. The company's mobile CIS products cover the mainstream demand of 8M-50M in the current market and are expected to become the largest main business in 2024. In response to the demand for high-end flagship models, several XS series high-end products for flagship cameras and auxiliary cameras (including telephoto and wide-angle) have been shipped on a large scale. According to the Starway platform information, in 2022, the company launched the SC550XS, the first 50MP ultra-high resolution 1.0 μm pixel size product, and the SC520XS, a 52MP ultra-high resolution 0.7 μm pixel size product. These two products were mass-produced in 2023. In January 2024, the company launched the SS580XS, the first 50M 1/1.28 inch product, which is the same platform product of 22nm HKMGStack. Aiming at the mainstream smartphone CIS market, the company is also developing in-depth technical cooperation with domestic fabs, using technological innovations such as single-chip integration to launch the SC5000CS, a more cost-effective high-resolution product.
The performance and competitiveness of new security products have been further improved. According to the semi-annual report forecast, with the recovery in demand in the security market, the company's product sales have increased significantly, and sales revenue has increased significantly. Currently, in the field of smart security, the company continues to make high-end efforts, and has successfully launched cutting-edge security product portfolios such as the Pro Series full performance upgrade series, AI Series advanced imaging series, and SL Series Super Star Light Series to better meet the intelligent stage of security monitoring. In 2023, the company launched the SC880SL, a new 4K ultra-starlight-level image sensor with a large target surface. In addition, it also launched several new upgraded AI series products, which can better enable smart wireless cameras and multi-camera solutions such as home IPC and AIoT terminals, successfully starting the path of iterative upgrading of AI series products. The company's machine vision products have been widely used in emerging application fields represented by drones, sweepers, and AR/VR; in industrial CIS, the company has launched a rich product matrix with three categories: surface array, intelligent transportation system, and linear array, covering all kinds of industrial inspection scenarios as well as mainstream industrial intelligence scenarios such as industrial barcode readers, AGV navigation systems, and 3D scanners.
Raise profit forecasts and maintain a “buy” rating. According to the company's interim report forecast update, we raised the company's high-end smartphone business shipment volume and adjusted the company's revenue forecast. The company's net profit for 2024-2026 is 0.382/0.61/0.801 billion yuan (originally 0.306/0.487/0.684 billion), corresponding PE is 59/37/28X, maintaining a “buy” rating.
Risk warning: customer orders fall short of expectations; industry sentiment falls short of expectations; supply chain risks.