2024H1's performance increased year-on-year, and the expansion of the product matrix helped increase revenue, maintaining a “buy” rating of 2024H1, achieved revenue of 0.92 billion yuan, +37.96% year over year, and achieved net profit of 0.152 billion yuan, +134.85% year over year; after deducting non-net profit of 0.146 billion yuan, +170.12% year on year, gross profit margin of 43.20%, +2.35 pcts year on year; 2024Q2 achieved revenue of 0.533 billion yuan, year on year + 52.78%, +37.66% month-on-month, achieving net profit attributable to mother of 0.098 billion yuan, +191.87% YoY, +81.26% month-on-month after deducting non-net profit of 0.098 billion yuan, YoY +242.78%, month-on-month +104.08%, gross profit margin 44.11%, +3.14pcts YoY, and +2.18pcts month-on-month. Benefiting from the continued expansion of the company's product matrix, we raised our profit forecast for 2024/2025/2026. The estimated net profit for 2024/2025/2026 is 0.337/0.456/0.609 billion yuan (previous value was 0.191/0.272/0.349 billion yuan), and the 2024/2025/2026 EPS is expected to be 3.01/4.07/5.43 yuan (previous value was 2.36/3.37/4.32 yuan). The current stock price corresponds to PE At 35.2/26.0/19.5 times, we are optimistic that the company's product matrix expansion will help increase revenue and maintain a “buy” rating.

The continuous penetration of downstream intelligence and the expansion of the product matrix contributed to revenue growth. The steady increase in gross margin and high performance benefited from the continuous increase in the intelligent penetration rate of the downstream smart home and consumer electronics industry, the continuous expansion of the company's product line, and the company's revenue growth. By product, the 2024H1 chip achieved revenue of 0.381 billion yuan (41.40% revenue), +72%, gross profit margin of 49.00%, +1.49pcts year over year; the module achieved revenue of 0.532 billion yuan (revenue share 57.80%), +22% year over year, gross profit margin of 38.91%, and +1.40 pcts year over year. At the same time, benefiting from the low price of raw materials, the increase in new customers, the high gross margin of new customers, and the increase in chip revenue share, the company's overall gross margin increased; the growth rate of the company's R&D expenses remained around 20%, and 2024H1 performance increased.

Continued penetration of downstream intelligence+continuous expansion of the company's product matrix opens up growth space. According to Statista estimates, the global smart home market revenue is expected to reach 154.4 billion US dollars in 2024, and the compound annual growth rate is expected to reach 11% in the next 5 years. At the same time, in 2023, the company will release a new dual-core RISC-V SoC with AI instruction expansion, designed for high-performance and high-security applications. As the product matrix gradually expands, the market capacity is expected to expand to 2.5 times the current level; we believe that with downstream ESP32-P4 Intelligence continues to penetrate, and the company's revenue is expected to continue to grow. At the same time, as the company's product matrix continues to expand, the company has sufficient growth momentum.

Risk warning: downstream demand falls short of expectations; promotion of new products falls short of expectations; industry competition intensifies.