对于业绩增长原因，乐鑫科技表示，1. Espressif Systems achieved revenue of 2.007 billion yuan in 2024, a year-on-year growth of 40.04%; the net income attributable to shareholders reached 0.339 billion yuan, a year-on-year growth of 149.13%; the overall gross margin rose to 43.91%. 2. Espressif Systems stated that the growth is mainly due to the continuous improvement of digitalization and intelligence penetration in various downstream industries, as well as the gradual release of new potential customers, with the company's product lines and R&D continuously expanding.
On March 21, the Star reported (Reporter Guo Hui) that Espressif Systems released its financial report for 2024 this evening (March 21).
According to the Earnings Reports, Espressif Systems' annual performance scale hit a record high. In 2024, the revenue achieved was 2.007 billion yuan, a year-on-year growth of 40.04%; the net income attributable to shareholders reached 0.339 billion yuan, a year-on-year growth of 149.13%.
Regarding the reasons for performance growth, Espressif Systems stated that last year's revenue growth was mainly due to the continuous improvement of digitalization and intelligence penetration in various downstream industries, as well as the gradual release of new potential customers from 2023 to 2024.
Currently, Espressif Systems' chip product line continues to expand, and the scope of chip R&D projects has also extended from the niche fields of Wi-Fi MCUs to a broader AIoT SoC field, conducting R&D expansion in the areas of SoC and wireless communications technologies, covering AI smart voice, AI image recognition, RISC-V processors, Wi-Fi 6, Bluetooth LE, Thread, Zigbee, Matter, and other technologies.
Specifically, taking the ESP32-S series as an example, starting with the ESP32-S3 chip, Espressif Systems has strengthened applications in edge AI. The ESP32-S3 chip adds vector instructions for accelerating neural network computing and signal processing; AI developers can utilize these vector instructions to achieve high-performance applications in image recognition, voice wakeup, and recognition, etc. The ESP32-P4 is Espressif Systems' first SoC without wireless connectivity features, breaking into the multimedia application market, driven by a self-developed high-performance dual-core RISC-V processor, featuring AI instruction extension and an advanced memory subsystem, suitable for customers with high edge computing capability requirements.
In 2024, Espressif Systems released new chips such as the ESP32-C61 and ESP32-H4, which have been upgraded in terms of power consumption, connection performance, and memory expansion capabilities, further meeting market users' demands for long battery life, low power consumption, and high performance.
According to a research report released by Donghai Securities Analyst Fang Ji on March 14, in addition to classic products (8266, ESP32, S2) and newer products (C2, C3, S3), Espressif Systems is also laying out new products (C5, C6, H2, H4, P4), which are expected to gradually scale up in 2025. At the same time, the company is also expanding its downstream applications into Consumer Electronics, networking equipment, and other niche markets, with the market capacity expanded to 2.5 times that of existing Internet of Things devices.
In addition to chip hardware, Espressif Systems is also developing and improving software application solutions, launching value-added services in the Internet of Things software sector.
For example, the AIoT platform created by Espressif's cloud product ESP RainMaker integrates the company's chip hardware, third-party voice assistants, mobile apps, and cloud backend, achieving a one-stop product service for hardware, software applications, and cloud.
Moreover, Espressif Systems plans to jointly release the AI + Hardware Intelligent Leap Plan at the end of 2024 with Volcano Engine, and subsequently, Espressif launched AI large model solutions, providing users with Internet of Things application solutions that enable on-device calls to cloud LLM large models alongside Doubao large models owned by ByteDance.
Espressif Systems stated that it is continuously launching new Internet of Things application solutions to lay out for future market development and explore new growth points.
In terms of applications, Smart Home remains the main source of income for Espressif Systems. However, the company also indicated that the non-smart home sector has shown higher growth rates, contributing to overall company growth.
Specifically, aside from Smart Home, Espressif Systems' products are widely used in Consumer Electronics, industrial control, Jiangsu Nonghua Intelligent Agriculture Technology, Medical, Energy management, and Vehicle Networking scenarios. The company previously disclosed that its core application markets such as Smart Home, Smart Lighting, and Consumer Electronics achieved a combined growth of over 30% in 2024, while emerging application markets like energy management, tools, and big health showed even more pronounced rapid growth.
It is noteworthy that in 2024, AIGC technology is developing rapidly, with large models being able to better understand and generate complex content, pushing various industries into a new stage of digitalization and intelligence, resulting in more AI-based terminal applications emerging. In 2024, Espressif cooperated with ByteDance to jointly promote the application solutions of Doubao large models in IoT devices, providing a one-stop turnkey solution through Wi-Fi transmission to access cloud intelligent agent services. This lays the ecological foundation for future innovations in smart terminal applications such as AI toys and AI glasses.
Currently, Espressif Systems is planning to increase investment in the research and development of smart terminal chips. On March 14, the company announced a plan for a private placement, intending to raise 1.778 billion yuan for the R&D and industrialization projects of Wi-Fi 7 router chips, Wi-Fi 7 smart terminal chips, RISC-V self-developed IP based AI edge chips, and the construction of the Shanghai R&D center.
Espressif Systems stated that as Vehicle Networking and intelligent application scenarios continue to expand, the rich Internet of Things application scenarios also impose higher requirements on the corresponding product technologies. "End devices need to support more extensive AI computing demands and require the integration of more flexible RISC-V AI acceleration chips for rapid local data processing and complex algorithm execution."
Among the projects for the research and industrialization of AI endpoint chips based on self-developed RISC-V IP, Espressif Systems plans to develop a new generation of endpoint AI chips, primarily targeting the Smart Home and smart control terminal markets. It will be a new generation of endpoint SoC that supports mainstream model deployment and can quickly complete AI inference or computation tasks.
In 2024, Espressif Systems' overall gross margin increased by 3.35 percentage points compared to the same period last year, reaching 43.91%.
Espressif Systems stated that in 2024, the pricing strategy for all its products remains stable, with the gross margin fluctuation of the chip Business mainly affecting the structural changes in sales. Meanwhile, the fluctuation in the gross margin of the module and development kit Business, besides being influenced by structural sales changes, has also benefited from economies of scale due to increased procurement volume. Furthermore, the structural change of an increased share of chip revenue has further enhanced the overall gross margin.
Espressif Systems indicated that when the overall gross margin reaches the preset target of 40%, the company will try to minimize changes in pricing.
While announcing the annual Earnings Reports, Espressif Systems revealed the annual profit distribution plan for 2024, proposing to distribute a cash dividend of 6 yuan (tax included) for every 10 shares to all Shareholders. Based on the total number of remaining shares after deducting the number of shares in the repurchase special securities Account, which amounts to 109,948,818 shares, a total cash dividend of 65.969 million yuan (tax included) is planned, accounting for 19.44% of the net income attributable to the parent company for the 2024 fiscal year. Additionally, Espressif Systems plans to transfer 4 shares for every 10 shares to all Shareholders from the capital reserve. After this transfer, the company’s total share capital will be 156,179,958 shares.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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