Incident description
On April 8, Aojie Technology announced the “2024 Annual Report of Aogee Technology Co., Ltd.”. In 2024, the company achieved total operating income of 3.386 billion yuan, an increase of 30.23% over the previous year; net profit to mother was -0.693 billion yuan, and losses increased by 0.187 billion yuan over the same period last year.
Incident Reviews
The recovery in demand is compounded by the company's product development. The overall revenue growth trend is good, but the increase in R&D investment suppresses profits.
With the steady rise in the downstream boom, and the company continues to advance in product development and market development for core products and services such as cellular baseband chips and smartphone SoC chips, the company achieved a significant increase in revenue in 2024, achieving a total revenue of 3.386 billion yuan, an increase of 30.23% over the previous year; of these, the 2024Q4 company achieved revenue of 0.846 billion yuan, +11.94% year over month. The gross margin of the 2024Q4 company increased month-on-month. The gross margin for the single quarter was 22.39%, +0.45pct month-on-month, but due to the advancement of key projects, the R&D expenses of the 2024Q4 company reached 0.337 billion yuan, +27.58% year-on-month, +8.95% month-on-month, and the influence of factors such as non-recurring income, asset impairment, and credit impairment suppressed profits. The net profit of 2024Q4 without return to mother was -0.231 billion yuan, and losses increased by 0.107, respectively. 0.056 billion yuan, realized net profit to mother of -0.693 billion yuan in 2024, and loss increased by 0.187 billion yuan over the previous year.
The core product matrix expanded, and smartphone SoCs began a new journey. In 2024, the company's three main business segments of chip products, chip customization business, and semiconductor IP licensing achieved revenue of 3.014 billion yuan, 0.336 billion yuan, and 0.35 billion yuan respectively, accounting for 89.02%, 9.92% and 1.04% of the main business revenue, respectively. The company's IoT cellular baseband chip division has become an important supplier for mainstream module manufacturers at home and abroad such as Yiyuan Communications, Sunsea Intelligence, China Mobile IoT, MeiG, Youfang Technology, Gaoxing, and Telit. According to TSR, the company has obtained 50% of the global market share in the 4G Cat.1 bis field, while 4GCat.1's shipments in 2024 will increase 100% year on year. In the future, with the gradual promotion of the 5G RedCap platform, the company's IoT cellular baseband chip market is expected to expand further. In terms of smartphone SoC, the company's first 4G4 core phone was shipped in 2024, fully verifying the performance and overall stability and reliability of the platform system. At the same time, the company's first octa-core smartphone chip platform, 5G REDCap SoC smartphone chip chip chip chip was launched at the end of the year, and R&D projects such as the second-generation octa-core smartphone chip platform and 5G SOC smartphone chip platform are also being actively promoted. The smartphone SoC market space is vast, and the company's key products, which are expected to help the company move forward on a new journey.
The expansion of automotive networking chips is accelerating, and there are significant opportunities for the chip customization business to welcome the wave of localization. At present, the company's automotive front-mounted chips have successfully entered the supply chain system of mainstream domestic automobile manufacturers. Modules equipped with the company's chips have been shipped on a large scale in many well-known models such as Chery, Pentium, and Changan, and the annual sales scale of the vehicle front-loading solution has exceeded one million levels. In terms of chip customization business, the company relies on mature large-scale chip design capabilities, rich experience in large-scale chip design service projects, strong software and hardware support capabilities, and flexible and diverse full-process comprehensive solutions. The companies it has already served cover leading artificial intelligence companies, large Internet technology companies, large-scale storage companies, leading RISC-V solution providers, industrial control companies, etc. In 2024, the company will help many customers enter mass production of next-generation high-end products, and high growth can be expected.
We expect the company's revenue to reach 4.41, 6.015, and 8.235 billion yuan in 2025-2027, corresponding PS is 7X, 5X, and 4X, maintaining a “buy” rating.
Risk Alerts
1. The risk that the semiconductor boom falls short of expectations;
2. The risk that the promotion of new products falls short of expectations.
