Incident: On August 30, the company released its 23 annual report. 23H1 achieved revenue of 385 million yuan, -26.6% year-on-year; net profit of 47 million yuan, -65.3% year-on-year; net profit of 38 million yuan after deducting non-return net profit of 38 million yuan, -65.0% year-on-year.
23Q2 performance improved month-on-month, in line with expectations. On a quarterly basis, 23Q2 achieved revenue of 210 million yuan, -20.22% year on year and 19.74% month on month; net profit for return was 28 million yuan, -54.93% year on year, and 46.29% month on month.
23Q2's performance improved month-on-month, mainly because the crystal industry cycle gradually bottomed out, 23H1 industrial chain inventory had returned to normal levels, and 23Q2's operating rate had rebounded, driving a month-on-month improvement in performance.
The gross margin declined year over year, and the cost ratio for the period decreased slightly year over year. 1) Gross profit margin: 23H1 gross margin was 24.19%, year-on-year -16.21pct. Among them, 23Q2 gross margin was 24.66%, -13.43 year on year and 1.02 pct month on month.
The month-on-month increase in gross margin in 23Q2 was mainly due to a recovery in operating rate and a reduction in cost amortization. As the company's operating rate continues to rise and the product structure continues to be optimized, profitability is expected to continue to improve; 2) Period expenses: The cost for the 23H1 period was 11.30%, -0.17 pct over the previous year. Among them, R&D, management, sales, and finance rates were 4.99%, 7.00%, 1.91%, and -2.60%, compared to -0.7, 0.62, 0.13, and -0.21 pct.
Promote the development progress of high-frequency, miniaturization, and high-end products such as vehicle specifications and industrial specifications, and continue to seize domestic market share. 1) Technology research and development: Achieve trial production and mass production of 76.8, 80, 96, 125, 156.25, 212, 285 MHz ultra-high frequency and ultra-small size products, with 300 MHz high base frequency processing capability; low power consumption, high accuracy, tuning fork XO series, TCXO series products, low phase noise, high stability and constant temperature OCXO series products, RTC modules, etc.; product characteristics optimization and yield improvement for vehicle specifications such as high frequency series, OSC bell vibration, etc., corresponding to the reliability and various indicators of vehicle specifications. 2) In terms of market expansion: Focusing on major customer strategies, we continue to promote the application of high-end products such as RTC clock modules, high-end active products, and high-frequency differential oscillators in industrial regulations, vehicle regulations, etc. Currently, it has passed the verification and review of some global high-quality Tier 1 and Tier 2 manufacturers, serving more than 10 OEMs and mainframe suppliers.
Profit forecast: Based on the progress of terminal demand recovery being lower than previously anticipated, net profit for 23-25 years was lowered to 1.49, 2.57, and 366 million yuan (previous values were 1.91, 3.01, and 3.90 million) to maintain the “buy” rating.
Risk warning: Consumer demand recovery falls short of expectations; increased risk of industry competition, etc.