Incident Overview
The company released its 2023 mid-year report. In the first half of 2023, the company achieved revenue of 2,042 billion yuan, a year-on-year decrease of 10.88%, net profit of 278 million yuan, a year-on-year decrease of 0.76%, net profit of non-return net profit of 262 million yuan, a year-on-year increase of 10.2%, and a gross profit margin of 26.01%, an increase of 3.45 pct. The net interest rate was 13.63%, an increase of 1.39 pct over the previous year.
According to estimates, the company's 23Q2 achieved revenue of 1,035 million yuan, a year-on-year decrease of 16.04%, a year-on-year increase of 2.88%, net profit of 147 million yuan, a year-on-year increase of 12.14%, a month-on-month increase of 12.21%, net profit margin of 147 million yuan, a year-on-year increase of 14.05%, a month-on-month increase of 26.72%, gross profit margin of 26.08%, a year-on-year increase of 3.89 pct, a year-on-year increase of 0.13pct, a net interest rate of 14.19%, a year-on-year increase of 3.57 pct, and a year-on-year increase of 1.14 pct, Q2 Q1 Overall improvement.
23H1 There is some pressure on revenue. The gross margin increased, and the company's net profit increased. In 2023H1, the company achieved revenue of 2,042 billion yuan, a year-on-year decrease of 10.88%, mainly due to the influence of the macro environment. The downstream terminal consumer products market continues to be sluggish, and the share of the company's consumer products continues to decline. However, the company adjusted its product layout in a timely manner, achieved breakthroughs in the fields of servers, automotive electronics, new energy, etc., and continued to increase its share, and is expected to continue to expand in the future.
The company's 23H1 gross profit margin was 26.01%, an increase of 3.45 pct over the previous year. The main reason was that the company continued to improve its digitization process. After 22Q4, the company completed factory relocation, and the Guangdong base was more digitized and had a cost advantage. Subsequently, with the increase in the capacity utilization rate of the Guangdong base, the company's marginal production costs dropped rapidly, and the company's overall cost advantage will continue to increase.
Actively lay out the server field, with sufficient momentum for subsequent growth
Data centers and servers are a strategic racetrack for the company's key layout. The main products are general server CPU motherboards, AI acceleration cards, power supplies, etc., as well as high-speed computers, switches, and routers. The company entered the Intel and AMD next-generation server vendor invitation directories in 2022. Intel verification has passed, and AMD is passing the index tests for its various products; the company's main ODM/OEM customers in the server field include HPE, ZTE, Xinhua 3, Great Wall, Inspur, Foxconn, Renbao, Guangda, Heshuo, Yingyeda, Weichuang, Gigabyte, Delta, Zhibang, Zhonglei, etc.; in terms of new product layout, the company focuses on high-end server development and is currently being introduced Eagle Stream and Birch Stream products are produced in small batches; in addition to the server field, the company also actively develops customers and carries out technical layout in the fields of automotive electronics, new energy, etc., laying a solid foundation for the company's long-term growth.
Investment advice
We expect the company's net profit for 2023/2024/2025 to reach 703/903/1,253 million yuan. According to the 2023/8/9 closing price of 35.34 yuan/share, PE is 16/12/9 times, maintaining the “buy” rating.
Risk warning
New production capacity fell short of expectations, downstream demand fell short of expectations, market development fell short of expectations, and the risk of fluctuations in the surrounding environment.