Incident: The company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 0.932 billion yuan, a year-on-year decrease of 21.27%; the profit side achieved net profit to mother of -0.285 billion yuan. In the second quarter of a single quarter, the company achieved operating income of 0.614 billion yuan, a sharp increase of 92.96% over the previous quarter; net profit to mother was -0.078 billion yuan, and the loss was significantly reduced by 62.40% compared to the first quarter
Overall performance improved significantly month-on-month: with the gradual recovery of the semiconductor industry, the downstream customer inventory situation has improved markedly, the company's business situation has been rapidly reversed, business has gradually improved, and second-quarter results have improved markedly month-on-month. The company's single Q2 chip mass production business revenue was 0.234 billion yuan, an increase of 125.00%; the chip design business achieved revenue of 0.193 billion yuan, an increase of 122.04%; the intellectual property licensing fee business achieved operating income of 0.16 billion yuan, an increase of 60.60% over the previous month; and royalty revenue was 0.024 billion yuan, a decrease of 11.79% over the previous month.
The design and mass production business has sufficient orders in hand, and the space is further opened up: the company continues to explore incremental markets and emerging markets with development potential, expanding leading customers in the industry. New orders have remained high for three consecutive quarters. By the end of the Q2 period, orders in hand were 2.271 billion yuan, and the conversion rate is expected to be about 81% within one year, providing a strong guarantee for the company's future revenue growth.
The core IP has been widely recognized: the company's 24H1 IP has been authorized 118 times, an increase of 57 times over the previous year, and is widely recognized globally. The company's NPU IP has been used by 72 customers in its 128 artificial intelligence chips, and VPU IP has been used by 3 of the top 5 Internet companies in China and 12 of the top 20 cloud platform solution providers in the world.
Investment advice: The company is expected to achieve operating income of 2.789, 3.405, and 4.237 billion yuan in 2024-2026, corresponding PS 5.2, 4.3, and 3.5 times, respectively. Maintain an “Overweight” rating.
Risk warning: technology licensing risk; risk of product or service client certification failure; risk of loss of R&D personnel; risk of overseas operation.