Event: on October 20, Shijia Photon released its third-quarter report of 2023. In the first three quarters of 2023, the company achieved operating income of 541 million yuan, down 20.96% from the same period last year; net profit from home was-28 million yuan, down 141.06% from the same period last year; and net profit from non-return was-47 million yuan, down 201.92% from the same period last year.
The performance of 2023Q3 is under pressure, and it is optimistic that the performance of high-speed optical module will increase after the release of AWG: in 2023, Q3 achieved revenue of 211 million yuan, down 17.34% from the same period last year; the net profit returned to the home was-10 million yuan, down 128.81% from the same period last year. The change in the company's Q3 net profit is mainly due to the decrease in operating income compared with the same period last year, and the price reduction of some products leads to a decrease in gross profit margin and a decrease in gross profit; the company continues to carry out research and development and technological innovation, and the corresponding R & D expenses increase compared with the same period last year, and the R & D expense rate is at a higher level in the industry; the company prepares for impairment of relevant assets according to the principle of prudence. In terms of expenses, the sales / R & D expenses of Q3 company in 2023 increased by 7.13% compared with the same period last year, while the management expenses decreased by 3.98%. The sales / management / R & D / financial expense rates were respectively higher than that of Q3 in 2022, and the overall expense rate increased significantly.
The advantage of passive + active dual platform is highlighted, and the continuous high level of R & D investment: in 2023, the R & D expenditure of Q3 company increased by 49.12% compared with the same period last year, and the R & D expenditure rate increased by 6.34pct. The company's passive + active dual platform advantage is becoming more and more prominent, and it has become a scientific and technological enterprise with core competitiveness in the domestic optical communication industry. Among them, in terms of passive chips, the lidar splitter chip has completed high-power verification; for 400G/800G requirements, ultra-wide bandwidth AWG chips have been developed in the backbone network and completed sample delivery, DR4/DR8 optical components have been developed in the data center and small batch supply has been achieved; silicon dioxide-based photonic chip manufacturing technology has been developed, which can provide corresponding services to the outside world. In terms of active chips, remarkable breakthroughs have been made in laser chips for gigabit access networks, high-power laser chips for silicon optics, laser chips for lidar, semiconductor optical amplifiers (SOA) and so on. Among them, XGS PON antireflective 10G 1270nm DFB chips are sold in bulk; in terms of high-speed chips, 50G PON EML and PAM4 100G EML are being developed, and 25g 1286nm DFB lasers are being validated by customers. We believe that as the company continues to increase R & D investment and technological innovation, deepen the advantages of passive + active dual platforms, and accumulate the R & D advantages of chip industrialization technology, the company's core competitiveness is expected to be gradually enhanced.
The establishment of a Thai subsidiary to further expand the international market, the proposed investment target Yuhan Optoelectronics acquisition of AOI is still in communication: in order to realize the company's international development strategy and make full use of Thailand's international trade advantages, the company plans to use its own funds of US $5 million to invest in setting up an overseas subsidiary SJ PHOTONS (THAILAND) CO.,LTD in Thailand. When the Thai subsidiary is established, the company and two natural persons jointly act as the sponsors. After the establishment of the Thai subsidiary, the two natural person shareholders transfer all their shares to Henan Shijia Communication Technology Co., Ltd., a wholly-owned subsidiary of the company. At present, the investment still needs to go through the domestic examination and approval or filing procedures for overseas investment, as well as the examination and approval or registration procedures such as Thailand's local investment license and enterprise registration. In addition, Yuhan Optoelectronics issued an explanatory letter to the company on September 14, indicating that it received a written notice from AOI on September 12 to terminate the SPA agreement signed by the two parties for the acquisition. In order to continue to promote this transaction, Yuhan Optoelectronics is communicating with AOI through a variety of channels. We believe that the establishment of a Thai subsidiary will help the company to actively expand its overseas business.
Profit forecast and investment rating: we predict that the company's 2023-2025 return net profit is 0.67 million yuan, the current share price corresponding to PE is respectively times 89-60-46, in view of the company's advanced optical chip supplier, continuous layout research and development of high-end products, future performance is expected to achieve rapid growth, to maintain the "buy" rating.
Risk hints: iterative risk of technology upgrading; risk of R & D failure; risk of brain drain of key technologies; risk of aggravation of market competition; risk of macroeconomic and industry fluctuations.