Telecom market and data center sales fell short of expectations, and the company's revenue performance declined in 2023
Yuanjie Technology released its 2023 annual report, achieving annual revenue of 144 million yuan, or -48.96% year on year; net profit to mother of 19.4798 million yuan, -80.58% year over year. By product, telecom market products achieved revenue of 133 million yuan, accounting for 92.14%. Revenue decreased by 43.83% year on year, gross profit margin was 38.87%, down 20.64 pct year on year.
In the telecom market, sales declined due to downstream customer inventories and a slowdown in the pace of terminal operator construction. Data centers and other products achieved revenue of 4.713,800 yuan, accounting for 3.26%, revenue -89.47% year-on-year, and gross profit margin of 83.60%, an increase of 9.03pct over the previous year. In terms of data centers, traditional cloud data centers experienced a significant slowdown and decline in 2023 after several years of large-scale investment, leading to a decline in revenue.
Based on the 2023 annual report and downstream industry demand, we lowered the 2024 and 2025 earnings forecasts and added 2026 profit forecasts. We expect net profit to be 0.34/0.41 billion yuan (original value 0.76 billion yuan) for 2024-2026, 0.40/0.48/0.56 yuan/share for EPS, respectively. The current stock price for 2024-2026 is 384.2/319.1/274.2 times, respectively, considering the company's 100G EML It is expected that a breakthrough will be achieved gradually and the “buy” rating will be maintained.
Client-side sample delivery testing is progressing gradually, and 100G EML is poised for transmission in the field of optical fiber access. The company has developed and tested 10G DFB products with differentiated solutions to customers, and has continuously optimized and upgraded 10GEML products. In the data center field, 100G PAM4 EML, 70mW/100mW high-power CW chips have completed product development, design and finalization, and sample delivery tests on clients. In higher speed application scenarios, the company has initially completed performance development and in-factory testing of 200G PAM4 EML, and is continuing to optimize it.
The company attaches importance to technology research and development to provide the company with new impetus for growth
The company focuses on the optical chip industry. After years of R&D and industrialization, the company has established an IDM full-process business system including chip design, wafer manufacturing, chip processing and testing, and has multiple production lines covering all processes of MOCVD epitaxial growth and grating processes. Facing market pressure, the company continued to increase R&D investment. In 2023, the company spent 39.461 million yuan on R&D, an increase of 14.23% over the previous year.
Risk warning: downstream demand falls short of expectations, market competition is fierce, product development progress falls short of expectations, etc.