occurrences

Huiding Technology released its 2024 semi-annual report: The company achieved total revenue of 2.256 billion yuan for the first half year of 2024, an increase of 11.58% over the previous year; achieved net profit of 0.317 billion yuan, which turned a loss into a profit; after deducting non-return net profit of 0.274 billion yuan, turned a loss into a profit.

Key points of investment

The company achieved cost reduction and efficiency, and the comprehensive gross margin level resumed growth during the reporting period, benefiting from increased demand from end customers, and the company's shipping volume and operating income achieved year-on-year growth. Q2 gross margin increased to 44.01%, an increase of 3.63 pct month-on-month, and the comprehensive gross margin resumed growth. At the same time, the company's product iteration and wafer costs declined, costs were optimized, and the comprehensive gross margin level resumed growth. Among them, the total amount of the company's sales expenses, management expenses, and R&D expenses decreased by 80.97 million yuan year on year, down 10.6% year on year.

Diversified layout of sensing products, new products are progressing smoothly

The ultrasonic fingerprint sensor launched by the company achieved commercial mass production on Vivo and iQOO flagship aircraft in the first half of '24, and is expected to be introduced by more well-known terminal customers, and is expected to be commercialized on a large scale in the fourth quarter; new-generation under-screen light sensors and NFC control chips were successfully introduced into leading mobile phone brand customer projects in the first half of 24 and are expected to be mass-produced and shipped in the second half of the year; in July, the company released electrochemical simulation front-end (AFE) solutions for continuous glucose monitoring (CGM) products, and automotive grade low-power Bluetooth SoC products to boost consumer healthcare Market; In addition, new products such as medium- and high-power audio products and low-power Bluetooth SoCs for CGM products are under continuous development.

The company continues to expand leading smart terminal customers and continuously enhance the breadth and depth of cooperation

Currently, the company has launched various products including fingerprint recognition, touch, active pens, audio, under-screen light sensors, and NFC/eSE chips in many mobile phone application fields, and has established cooperative relationships with more and more mobile phone brands to gradually increase the stand-alone value of smartphone terminals and become the company's main source of revenue. In the PC and tablet market, the company's diversified products such as capacitive fingerprints, touch controls, touchpads, active pens, audio, and under-screen light sensors have become the second largest source of revenue. In addition, in the field of smart wearable devices and the industrial Internet of Things, the company can also provide products such as health sensors, low-power Bluetooth SoCs, under-screen light sensors, touch and audio. The application scenarios are rich and the customer base is becoming more and more diverse, laying a solid foundation for the company's product promotion and increasing market awareness.

Profit forecasting

The company's revenue for 2024-2026 is 4.833, 5.508, and 6.334 billion yuan respectively, EPS is 1.47, 1.63, and 1.93 yuan, respectively. The PE corresponding to the current stock price is 39.1, 35.2, and 29.8 times, respectively, maintaining the “gain” rating.

Risk warning

Risk of market competition, risk of external environment, risk of downstream demand falling short of expectations, risk of inventory impairment, etc.