Incident: On April 24, the company released its 2024 quarterly report. 2024Q1. The company achieved revenue of 75 million yuan, +3.74% year over year; net profit to mother was 0.06 million yuan, turning a year-on-year loss into a profit; net profit after deducting non-return to mother was 0.05 billion yuan, turning a year-on-year loss into a profit.
Q1 turned net profit into profit and actively expanded new AI and XR tracks. 2024Q1's revenue continues to grow. According to the company's 2023 annual report, in addition to traditional professional audition products, the company's new virtual reality products have contributed revenue in 2023. In addition, the company actively pioneered a new AI racetrack. On the one hand, it launched a Plato AI intelligent recognition management system to improve unmanned inspection efficiency. On the other hand, the company made a breakthrough in overseas business and established a business partnership with Company N, an internationally renowned leader in graphics technology and artificial intelligence computing, which is expected to directly supply and continue to expand new businesses. We believe the company's tradition The business is expected to be gradually repaired, combined with the gradual expansion of new business, which is expected to open up new growth space.
Profitability has been greatly improved, and expenses are well controlled. 2024Q1, the company's gross margin was 55.5%, +14.63pct year over year, and +17.68pct month-on-month. We believe that with the recovery of the company's traditional business demand and the expansion and gradual release of new products, the gross margin is expected to rise steadily. From the cost side, the company's expenditure rate for the period was 61.05%, year-on-year - 4.6pct, and sales/management/ R&D/ finance expenses were 0.15/0.11/0.16/0.03 billion yuan respectively, -3.53%/+0.49%/+1.89%/-30.47%. Among them, the large change in financial expenses was mainly due to an increase in interest income on deposits. The increase in R&D expenses was mainly due to the company's forward-looking layout of new products, new tracks, and new businesses. In the long run, it is expected to enhance the company's competitiveness and promote long-term company sustainability development.
Self-developed chips are progressing smoothly, further enhancing the company's competitiveness. The company insists on independent research and development, and continues to incubate and invest in professional chips in the audio and video field. According to the company's official account, on April 17, 2024, the company released three chips: Hanshuo, Zeus, and Thor. Among them, the “Coollights Hanshuo LDV4045 chip” is the world's first LED integrated chip, leaving the traditional era of using sender/receiver cards, network cables, and high power consumption, and has a wider range of usage scenarios; the “Zeus Zeus Zeus 0108 chip” is the first autonomous and controllable professional audio and video processing ASIC chip in China. It better meets the diverse product needs and autonomous controllable needs of customers in key industries; the “Thor Thor ULC32A chip” is a human-computer interactive display chip that can be used in industrial control, beauty equipment, medical devices, charging piles, smart homes, etc. We believe that the company has gained a first-mover advantage in the field of audio and video professional chips, and that subsequent introduction of chips will help improve the company's competitiveness and profitability, bring new growth, and help the company's long-term sustainable development.
Profit forecast and investment rating: The company's net profit for 2024-2026 is estimated to be 1.32/2.07/332 million yuan, respectively. The current stock price corresponds to PE of 45/29/18 times, respectively, maintaining a “buy” rating.
Risk warning: Customer growth falls short of expectations, downstream demand falls short of expectations, risk of fluctuations in raw material prices, risk of macroeconomic fluctuations.