Event: On July 15, 2024, the company released a performance forecast. It is expected that H1 will achieve operating income of 0.25 billion yuan to 0.26 billion yuan in 2024, an increase of 19.28% to 24.05%; achieve net profit due to mother of 20 million yuan to 25 million yuan, and -15.7636 million yuan in the same period last year, a change of 226.87% to 258.59%; achieve net profit of 20 million yuan to 25 million yuan Million yuan, achieved -15.651 million yuan in the same period last year, a change of 227.79% to 259.73%.
Comment: Looking at the single quarter, the Q2 single quarter results continued to increase year over month. Q2 revenue is expected to reach 0.142 billion yuan to 0.152 billion yuan in a single quarter, up 23.48% to 32.17% year on year, and 31.48% to 40.74% month on month; net profit to mother is estimated to be 11.4075 million yuan to 16.4075 million yuan, negative for the same period last year, increasing 32.76% to 90.95% month on month. In 2024, the company continued to promote the development of its main business and achieved a month-on-month recovery in the first and second quarters. Therefore, we are optimistic about the future development of the company and the continuation of this trend in subsequent quarters.
The customer's bankruptcy and business difficulties were reversed, and semi-annual net profit turned loss into profit. Sleepme is an important customer of the company. It contributed more than 20% of the company's revenue in 2022. It filed for bankruptcy on May 11 last year and generated bad debts of 34.4697 million yuan. As a result, the company achieved net profit due to mother of 15.7636 million yuan and net profit of non-return to mother of 15.651 million yuan in the half year of 2023. The company has fully written off bad debts in 2023, completely breaking out of the net profit management dilemma. 2024H1, the company has good production and operation, insists on deepening its main business, strengthening market development, and speeding up technology research and product iteration. Businesses such as semiconductor thermoelectric devices, thermoelectric systems, and complete machine products are developing well, and the overall sales revenue scale is growing steadily. We believe that the downward trend in performance due to customer bankruptcy is unsustainable and will not damage the rights and interests of the company and small to medium shareholders and the core competitiveness of semiconductor thermoelectric equipment products.
Demand for AI computing power drives high-speed optical modules, and the company is expected to continue to expand in the high-end TEC domestic replacement process. The high-speed optical module can effectively improve the data transmission speed and computational capacity of AI training. Since large models place higher demands on high traffic and bandwidth, according to market forecasts, optical modules are expected to advance rapidly in the direction of 800G and 1.6T. Currently, high-end semiconductor refrigeration technology is mainly dominated by a series of leading international companies from the US and Japan, such as Ferrotec, KELK Ltd, and Phononic, and domestic companies are catching up at an accelerated pace. Micro TEC is an important component of high-speed optical modules. The company's Micro TEC, which is used in digital 400G/800G high-speed optical modules, is already in the sample delivery verification stage, and with breakthroughs in key core technology, product performance is currently in the same range as similar products from leading foreign companies. In addition, the company already has a mass production capacity of 3 million MicroTEC tablets per year, which can rapidly expand production according to downstream demand.
Investment advice: As demand for high-speed optical modules rises under the wave of AI computing power construction, we are optimistic about the company's MicroTec technology R&D implementation and production volume. Considering the pressure on the company's 23-year performance, the company's net profit for the year 24, 25, and 26 is expected to be 0.063/0.075/0.101 billion yuan, respectively, maintaining a “buy” rating.
Risk warning: core competitiveness risk, single risk for major product customers, risk of fluctuating raw material prices, risk of production capacity absorption in fund-raising projects, macroeconomic environmental risk, and performance forecast as expected values. The actual value is based on the company's semi-annual report