The implementation of the executive holdings increase has been completed, demonstrating confidence in future development. The company announced that some directors, senior management and core personnel of Nanochip intend to increase their holdings of the company's shares within 3 months from March 20, 2024. The total amount of this increase in holdings is RMB 14 million to RMB 21 million. As of March 21, 2024, the increase in holdings through Yinwan Quanying Private Equity Investment Fund No. 16 increased the company's shares of 162,739 shares in the Shanghai Stock Exchange trading system, accounting for 0.11% of the company's total share capital, increasing the total amount of holdings by 17.979 million yuan. The plan to increase their holdings has been completed, and the increase in Naxin's micro executive holdings shows their confidence in the company's future development and recognition of long-term investment value.
New isolation+power management products are blooming, and 2024 is about to be released. Isolated drive products with protective functions have been mass-produced in main drive applications for some NEV customers; functional safety main drive isolated drive products are expected to be mass-produced in 2024; leading customers of photovoltaic inverters and industrial motor drives are implementing isolated drives to replace optocoupler drives. The company's single-channel/three-channel/12-channel taillight LED driver chips were successfully introduced to leading automotive headlight customers and shipped on a large scale; next-generation isolated half-bridge drive and multi-channel half-bridge motor drive products were mass-produced in 2023Q3; power supply LDO has already been introduced to some customers; and products related to high-side switches are expected to be mass-produced in 2024.
The magnetic sensor market is growing rapidly and is expected to become the company's growth engine. The market size of magnetic sensors is estimated to be nearly 15 billion yuan in '27, with automotive applications accounting for more than half, driving market demand for related signal sensing chips. The company's sensor products achieved revenue of 110 million yuan in 2022, an increase of 202.35% over the previous year. In the short term, the company's various new products such as magnetic sensors and humidity sensors have entered the mass production stage, which will bring additional revenue to the company. In the long run, the company's customer resources are high, the technical strength is strong, the participating companies have remarkable synergy effects, and the sensor product matrix is constantly being improved, which is expected to become the company's growth engine.
The acquisition of Quantum is imminent, and the customer and product matrices are rapidly penetrating. Nanochip plans to acquire 70% of Quantum's shares. The target products include audio SoC chips and data converters in signal chain chip products. The 2022 revenue is 305 million yuan, and the gross margin is 61.15%. We believe that the acquisition is expected to have a synergistic effect and help the company broaden its customer and product matrix.
Profit forecasts and investment suggestions: Optimistic that the company continues to break through in automotive-grade products and magnetic sensor chips, acquire Quantum Micro's product matrix to build an analog chip platform company. We expect the company's 2024/2025 revenue of 23.01/2,852 billion yuan and net profit of 135/393 million yuan to maintain a “highly recommended” rating.
Risk warning: Downstream demand falls short of expectations, new product development progress falls short of expectations, overseas manufacturers compete.