Investment in R&D increased the pressure on profits, maintaining the “buy” rating company's 23Q1-Q3 revenue of 222 million yuan, a similar increase of 30.1%; net profit of the mother -- 29 million yuan, a decrease of 193.9%; net profit after deduction of non-return net profit -- 337 million yuan, a decrease of 250.6%; 23Q3 single-quarter revenue of 70 million yuan, a decrease of 14.3%; net profit of net income from net income of 29 million yuan, a decrease of 339.7%; net profit from non-return to the mother -- 032 million yuan, a decrease of 556.9%. The company continues to improve product performance and drive sales order growth; however, the profit side is under pressure due to increased share payments and R&D investment. The estimated EPS for 23-25 is -0.01/0.10/0.15 yuan, with a comparable company average of 23E PS 31.8x (Wind). Considering the company's global competitiveness in terms of international customers, 2023E is given 36.0xPS, with a target price of 33.08 yuan, “buy”.
R&D investment continues to grow, and new products are launched at an accelerated pace
The sales/management/R&D expenses of 23Q1-Q3 company were 0.58/0.41/150 million yuan; the sales/management/R&D expenses rate was 26.2%/18.6%/67.5% respectively, +3.0/-1.0/ +16.9pct over the previous year. The sales, management, and R&D expenses for the single quarter of 23Q3 were 32.9%/19.9%/84.7%, respectively, compared to +8.9/+1.3/+32.0pct. The company continues to increase investment in R&D, which will help accelerate the launch of the company's new products. In October 2023, the company announced three new products: Nanospice X, a leading circuit type-driven Spice emulator; nanoSpice ProX, an innovative high-speed, high-accuracy FastSpice emulator; and VeriSim, a new digital logic circuit simulator. We believe the company will maintain investment in R&D, accelerate product iteration, and continue to increase competitiveness.
The advantages of card slots in key links are obvious, and the technology is advanced
The company is deeply involved in technological innovation, creating application-driven EDA full-process solutions covering integrated circuit design and manufacturing based on DTCO concepts, and continuously improving the competitiveness of the industry. At present, the company has three types of core technologies: manufacturing EDA technology, design EDA technology, and semiconductor device characteristic testing technology, and more than 30 corresponding product segments and services. It has formed a relatively stable market position on a global scale and is widely used by the world's leading fabs, and has obvious advantages in key links. We believe that in the future, the company will continue to expand to other sectors based on technological advantages, enrich the product system, and promote continuous growth in performance.
Build an EDA industry-university-research ecosystem and create an ecological barrier
The company continues to invest in and lay out the EDA industry in various forms, and has joined forces such as production, academia, and research to build a competitive and vibrant EDA ecosystem. The company's EDA? The concept is dedicated to building a platform for academics and industry leaders in the field of EDA to communicate and build a bridge of collaboration between EDA companies and users.
At present, the company has reached cooperation agreements with many upstream and downstream companies in the industrial chain, such as Hongzhiwei, Alibaba Cloud, MPI, Rohde and Schwarz. We believe that the company continues to strengthen its industrial layout, and ecological barriers may gradually be formed.
Risk warning: R&D results fall short of expectations; market competition intensifies.