Incident: On April 23, 2024, the company released its 2023 annual report and 2024 Q1 report. In 2023, it achieved revenue of 7.5 billion yuan (-12% YoY), net profit to mother of 520 million yuan (-20% YoY), Q1 revenue of 1.9 billion yuan in 2024, and net profit of 150 million yuan (+4% YoY). In line with market expectations.
The consumer electronics business is under pressure in the short term and is optimistic about full-year performance growth: the 2023 Annual Report and 2024 Q1 Report achieved revenue of 7.5 billion yuan (-12% YoY) and net profit to mother of 520 million yuan (-20% YoY). The decline in performance was mainly driven by declining terminal demand and downstream inventory pressure, and the recovery in industry prosperity was still relatively slow. Q1 revenue for 2024 was 1.9 billion yuan, with net profit of 150 million yuan (+4% year-on-year). Benefiting from the impact of seasonal consumer electronics pick-up and smooth expansion of overseas business, the company's first-quarter results still showed a growing trend even with a high base in Q1 in 2023. We are optimistic about the introduction of new materials for consumer electronics companies this year and the continued expansion of overseas related businesses.
5G penetration has helped the antenna business grow, and there is plenty of room for wireless charging: benefiting from the continuous increase in the penetration rate of 5G phones, the increase in the number of antennas required in 5G phones, and the increase in antenna value, it still creates growth opportunities for the company's antenna business. At the same time, since wireless charging has the advantage of being highly compatible and can be expanded in many scenarios, the penetration rate of wireless charging phones is also increasing. The company has been deeply involved in magnetic charging technology for many years, built vertical integration capabilities from wireless charging materials to modules, and has also accumulated extensive experience in supplying domestic and foreign technology manufacturers, especially in magnetic materials such as ferrite and nanocrystals. The company's wireless charging products can be used in fields such as consumer electronics and automobiles. The market space is broad, or it can create new growth opportunities for the company.
Benefiting from global satellite network coverage, receiver penetration increased: Starlink satellites are deployed in low-Earth orbit to provide coverage of the global network. Satellite communications require a lot of power, and Starlink terrestrial receivers are essential for signal transmission. The transmission power of the Starlink terrestrial receiver can reach 2.44W, while the maximum transmission power of a mobile phone directly connected to a satellite is between 23 and 26 dbm (0.2 to 0.4 W). More satellites entering orbit have increased global internet coverage and more data transmission bandwidth, and each Starlink V2mini satellite provides a speed of 80 Gbps. The higher bandwidth can accommodate more ground receiving equipment, and the penetration rate of terrestrial receivers increases. With the gradual launch of overseas satellites, the penetration rate of terrestrial receivers is expected to increase further.
Profit forecast and investment rating: Benefiting from overseas business growth and consumer electronics recovery, we slightly adjusted the 2024-2025 net profit forecast to be 8/12 billion yuan, the previous value was 8/13 billion yuan, and the 2026 forecast was added to 1.7 billion yuan, maintaining the “buy” rating.
Risk warning: Satellite launches fell short of expectations, and consumer electronics recovery fell short of expectations.