Brief performance review
On April 21, 2024, the company disclosed its 2023 annual report. In 2023, it achieved revenue of 5.410 billion yuan, an increase of 0.12% over the previous year, and realized net profit of 924 million yuan, or -12.85% year-on-year. Among them, Q4 achieved revenue of 1,369 million yuan in a single quarter, an increase of 38.92% year on year, and realized net profit to mother of 306 million yuan, +130.95% year over year.
Management analysis
Downstream demand rebounded steadily in 4Q23, and the company's revenue improved year over year. In 2023, as competition in the domestic power semiconductor market intensified, downstream demand slowly recovered. The company changed revenue from negative to positive year-on-year in 4Q23, and achieved year-on-year positive revenue growth, mainly sales of photovoltaic diodes, SiC, IGBT and other products. 4Q23 achieved net profit not attributable to mother of 91 million yuan, -26.02% year-on-year. The company's non-recurring profit and loss in 2023 was mainly due to the company's indirect holding of shares in Ruineng Semiconductor through a partnership share in Beijing Guangmeng. The fair value of this investment changed to 204 million yuan.
Continue to increase investment in new product research and development, and acquire vertically integrated industrial chain resources from Hunan Jiechuwei. In 2023, the company's R&D expenditure rate was 6.58%, an increase of 1.16pcts over the same period of the previous year. The company actively promoted key R&D projects and completed the development of a full range of Fabless 8/12-inch platform Trench 1200V IGBT chips 10A-200A, focusing on industrial control, photovoltaic inverters, and new energy vehicles. In '23, the company's new energy vehicle PTC's 1200V series single tube passed vehicle certification and began mass delivery, and successfully developed a photovoltaic IGBT module and put it on the market. The company signed a contract with Southeast University to jointly build the “Yangjie Dongda Wide Bandgap Semiconductor Joint R&D Center”. In terms of automotive modules, the company's self-developed automotive SiC modules have been tested and cooperated with a number of Tier 1 and car companies. In 2023, by continuing to acquire 30% of Hunan Jiechuwei Company's shares, the company completed its control over Jiechuwei, further improved the company's wafer manufacturing capabilities, and strengthened the core competitiveness of the IDM model.
In the future, as demand in fields such as new energy vehicles, industrial control, and photovoltaics picks up, we are optimistic that the company's performance will gradually usher in an upward inflection point under the improvement of product structure and capacity utilization.
Profit Forecasts, Valuations, and Ratings
Considering the gradual recovery of industry sentiment, we predict that the company's net profit for 24-26 will be 10.03/12.79/1,582 billion yuan, respectively, +9%/+28%/+24% year over year, corresponding EPS of 1.85/2.36/2.91 yuan, respectively. The current price of the company's stock corresponds to a PE valuation of 19/15/12 times, maintaining a “buy” rating.
Risk warning
The recovery in industry demand fell short of expectations; market competition intensified; exchange rate fluctuations; production capacity investment fell short of expectations; and the ban on restricted stocks was lifted.