Core views
The company released a report for the first quarter of 2024, achieving revenue of 6.292 billion yuan and net profit of 278 million yuan; for the full year of 2023, the company achieved revenue of 24.062 billion yuan, achieving net profit of 6.185 billion yuan. The company is a leading enterprise in the printer field. The A3 series products independently developed by Bentu are officially mass-produced. The market share of printer consumables is leading the world. The increase in 24Q1's A3 product shipment ratio has led to a significant increase in gross margin, which is expected to benefit from a recovery in commercial and credit innovation market demand in the future. Integrated circuit business companies have introduced benchmark users, and the industry is at the bottom of the cycle. It is expected to pick up and drive a recovery in Jiuhai Micro's performance.
The company accrued asset impairment losses for some of its subsidiaries, resulting in a decrease of 6.09 billion yuan in net profit to the mother in 2023, and the risk of subsequent asset impairment was reduced. According to the company's results for the first quarter of 2023 and 2024, we adjusted the profit forecast for 2024-2025 and added a 2026 forecast. The estimated revenue is 264.69/304.48/34,408 billion yuan respectively, up 10.00/ 15.03%/13.01% year-on-year respectively, and net profit to mother is 11.98/16.88/ 21.36 billion yuan, up 119.36%/26.56% year-on-year respectively, corresponding to PE30/21/17 times, to maintain “buy” “Enter” rating.
occurrences
On April 30, Nasdaq released its report for the first quarter of 2024. In the first quarter of 2024, the company achieved revenue of 6.292 billion yuan, a year-on-year decrease of 3.49%; realized net profit of 278 million yuan, an increase of 31.34% over the previous year; and realized net profit of 265 million yuan without return to mother, an increase of 30.48% over the previous year. Previously, the company released its 2023 annual report. In 2023, the company achieved revenue of 24.062 billion yuan, a year-on-year decrease of 6.94%; realized net profit attributable to mother of 6.185 billion yuan, a year-on-year decrease of 432.02%; and realized net profit deducted from non-mother of 6.297 billion yuan, a year-on-year decrease of 476.88%.
Brief review
The subsidiary accrued asset impairment losses resulting in non-cash losses, which affected profits in 2023. Profits in 2024 increased rapidly year-on-year. (The company's revenue side declined in 2023 due to pressure from domestic and overseas commercial and domestic credit innovation markets. Furthermore, the business development and supply chain of some of the company's subsidiaries continued to be negatively affected, leading to a decline in performance and a decline in liquidity. The company has carefully lowered its forecasts for the future operations and profits of the relevant subsidiaries. According to the evaluation report, the company accrued asset impairment losses for relevant subsidiaries totaling 9.383 billion yuan, reducing net profit attributable to parent company owners by 6.087 billion yuan in 2023. If this impact is excluded, the company's overall operating profit remains positive. The company's revenue in the first quarter of 2024 still declined slightly due to demand, but the revenue structure of core sectors such as Bentu improved, and gross margin increased significantly, driving the company's excellent overall profit side performance.
Shipments of the Bentu A3 black and white and color copier increased rapidly year over year, and the recovery in the commercial and Xinchuang markets is worth looking forward to. The company's core subsidiary, Bentu, achieved revenue of 3.886 billion yuan in 2023, a year-on-year decrease of 18.38%; net profit of 555 million yuan, a year-on-year decrease of 27.22%; and Bentu printer sales fell 22.06% year on year.
In 2023, the pace of the Xinchuang market changed, and competition in the commercial market intensified. Against this background, the company improved its product layout, sales of mid-range and high-end models increased year-on-year, while actively expanding overseas markets such as SCO, ASEAN, and Belt and Road; the Xinchuang market declined in shipments due to the overall pace, but its share in the financial sector was leading.
Bentu increased investment in R&D, and the first self-developed A3 black and white and color copier was officially commercialized and mass-produced in '23. In the first quarter of 2024, overall market demand picked up but was still relatively low. Pentu's revenue was 1,027 billion yuan, down 20.22% year on year; net profit was 193 million yuan, up 21.89% year on year; and local printer sales fell 33.89% year on year, up 24.91% month on month. Against the backdrop of declining revenue and shipments, the product structure of Pentu's shipments improved markedly. Shipments of the new A3 printer increased 40% year on year, and gross margin increased 9 percentage points year on year in a single quarter. With the recovery of the commercial market, the Party and Government Innovation market sinks, and the accelerated penetration of industry innovation, A3 printers are expected to usher in a wider market space, driving the company's profitability to increase in 24 years.
Jukai Micro Benchmark customers successfully introduced it, and the market share of general printer consumables remained the top in the world. The company's subsidiary Jihaiwei achieved revenue of 1,422 million yuan and net profit of 173 million yuan, a year-on-year decline. Among them, the profit side declined significantly due to exchange rate fluctuations and supply chain impact. Jihaiwei's financial performance in the first quarter of 2024 continued the trend for the full year of 2023, but achieved significant improvements from month to month. Jihaiwei has increased investment in R&D, launched a variety of MCU products in the middle and high-end industries, automotive electronics, etc., covering the market in depth, and successfully introducing benchmark customers, providing strong support for the future growth of Jihaiwei's performance. In terms of general consumables, the company had revenue of 5.588 billion yuan and net profit of 133 million yuan. The profit side declined significantly due to exchange rate fluctuations; the business recovered in the first quarter of 2024. Revenue and profit were basically the same as the same period last year, and general consumables shipments increased by more than 10%. The printer consumables business maintains the top share in the world, and it is expected that performance will pick up as the printer business recovers.
Investment proposal: The company is a leading enterprise in the printer field. A3 series products independently developed by Bentu are officially mass-produced, leading the market share of printer consumables in the world. The increase in 24Q1 A3 product shipment ratio has led to a significant increase in gross margin, which is expected to benefit from a recovery in commercial and Xinchuang market demand in the future. Integrated circuit business companies have introduced benchmark users, and the industry is at the bottom of the cycle. It is expected to pick up and drive a recovery in Jiuhai Micro's performance. The company accrued asset impairment losses for some of its subsidiaries, resulting in a decrease of 6.09 billion yuan in net profit to the mother in 2023, and the risk of subsequent asset impairment was reduced. According to the company's results for the first quarter of 2023 and 2024, we adjusted the profit forecast for 2024-2025 and added a 2026 forecast. The estimated revenue is 264.69/304.48/34,408 billion yuan respectively, up 10.00/ 15.03%/13.01% year-on-year respectively, and net profit to mother is 11.98/16.88/ 21.36 billion yuan, up 119.36%/26.56% year-on-year respectively, corresponding to PE30/21/17 times, to maintain “buy” “Enter” rating.