3Q23: the revenue has improved significantly, and the profit loss has gradually narrowed.
The company's 3Q23 achieved a revenue of 126 million yuan (yoy:-14.80%,qoq:+31.15%), which was in line with our previous forecast of 129 million yuan. The net profit of the company was-18 million yuan (3.16 million yuan lower than the previous month), and the non-net profit was-22.95 million yuan (1.43 million yuan less than the previous month). 3Q23 revenue month-on-month increase is mainly due to BMS and other analog products to resume delivery, and the company's EC/PD protocol chips and other new products have been released. As upstream wafer prices remained high, while 8-digit MCU product prices remained under pressure, 3Q23 gross margin fell 2.21pct to 27.59% month-on-month. Considering that the recovery of demand in the simulation industry is still slow, we have lowered our revenue forecast for 23-25 to 443 million RMB 635 million RMB. Considering that the company has launched new products in the PC and automobile field one after another, revenue is expected to return to high growth after 24 years, giving 10 times 24PS (comparable company Wind unanimously expected 8x 24PS), corresponding to the target price of 44.7 yuan, "buy" rating.
3Q23 recalled: EC chips to achieve large-scale shipments, gross profit margin is still a small decline in 3Q23 customer inventory deregulation is coming to an end, AIOT demand began to recover, a single BMS and other simulation products in September to resume delivery. In terms of new products, EC chips and PD protocol chips for the PC market began to increase in the third quarter, with multiple factors driving revenue in the third quarter to achieve rapid growth compared with the previous quarter. 3Q23 gross margin is 27.59% (yoy:-8.87pct,qoq:-2.21pct), which is expected to bottom out and pick up as upstream costs fall and new products are introduced. As new products such as high-grade car specifications MCU and 12-18 BMS are still under development, 3Q23 R & D costs 47 million yuan (yoy:-15.26%,qoq:
+ 20.51%), not yet profitable in a single quarter. By the end of the third quarter, the company's inventory was 230 million yuan, an increase of 8 million yuan over the end of the second quarter, and the inventory turnover days were 290.6 days, down 55 days from the end of the previous quarter.
4Q23/24: revenue is expected to return to high year-on-year growth, the equity incentive plan shows confidence that we expect the company's revenue to return to rapid growth in 2024, mainly due to: 1) Analog signal chain: 2-5 BMS products begin to expand, mainly used in laptops, power tools, drones and other scenarios; the company is expected to meet the ASIL-D level of 12-18 BMS AFE chips launched in 24 years. 2) MCU: EC and PD chips for PC continue to be imported to new customers, and the second generation EC chips are being verified by customers; vehicle specification-level MCU has obtained a number of automotive customer certification and began to increase. 3) Health Measurement AIOT: benefiting from Huawei Hongmeng's ecological cooperation, shipments have increased steadily. In addition, the company issued a 2023 restricted stock incentive plan. The unlocking conditions are based on 23-year revenue, and the 24-28 revenue growth rate is not less than 40%, 80%, 130%, 200%, 300%, 200%, and 28 years, respectively. CAGR=30%, shows that the company has confidence in five years of growth.
Investment advice: target price 44.7 yuan, give "buy" rating, we expect 23-25 revenue of 443, 635, 859 million respectively. Considering that the company has launched new products in the PC and automobile field one after another, revenue is expected to return to high growth after 24 years, giving 10 times 24PS (comparable company Wind unanimously expected 8x 24PS), corresponding to the target price of 44.7 yuan, "buy" rating.
Risk Tip: the promotion of new products is not as expected, the recovery of terminal demand is not as expected, and gross profit margin continues to decline.