occurrences

On April 29, 2024, the company released its annual report for the year 23 and the quarterly report for '24. It achieved revenue of 3.57 billion yuan in 23, +3.1% year over year, and a return of 610 million yuan, and +16.5% year over year. Among them, Q4 achieved revenue of 740 million yuan, -7.3% year-on-month, and -18.1% month-on-month; the return to mother was 160 million yuan, +31.3% year-on-year, and +10.3% month-on-month. In the first quarter of '24, we achieved revenue of 690 million yuan, -0.6% YoY, -6.4% month-on-month; return to mother of 120 million yuan, +4.2% YoY and -22.6% month-on-month.

reviews

The company was affected by the industry's inventory removal, and the Q1 revenue growth rate declined. The company continues to expand product application areas and lay out satellite communications, 5.5G, and low-altitude economy. In the low-orbit satellite and commercial aerospace sector, various TR module products have begun to be delivered to customers; in the base station sector, demand for high-linear control devices used in next-generation smart antennas continues to be strong; in the terminal field, RF amplification chips have been developed, and RF switches, antenna tuners, and DiFEM chips have been mass-produced. The company's revenue for T/R components and RF modules in '23 was 3.38 billion (+7.6% YoY), the revenue for RF chips was 130 million (-53.0% YoY), and other chips were 50 million (-7.1% YoY).

The company's 23-year gross profit margin was 32.3% (+1.6 pct year on year), 24Q1 gross profit margin of 35.6% (+3.9 pct year on year). The internal product structure was optimized, the proportion of self-developed chips increased, and the scale effect was gradually unleashed. By product, the company's gross profit margin for T/R modules and RF modules in '23 was 31.9% (+2.7 pct year on year), the gross profit margin for RF chips was 33.5% (-9.1 pct year on year), and the gross profit margin for other chips was 57.1% (-0.9 pct year on year). The company's net profit margin for 23 years was 17.0% (+2.0pct year on year), 24Q1 net profit margin was 17.4% (+0.8pct year on year), and profitability increased steadily.

The company's 24Q1 contract debt was $25 million, +341.3% compared to the beginning of the period. The company has 240 million projects under construction in 24Q1, +37.7% compared to the beginning of the period. The construction of RF integrated circuit industrialization projects continues to advance, and the gradual release of production capacity supports long-term development.

Profit Forecasts, Valuations, and Ratings

As the leading platform for T/R components in China, the company develops self-developed chips to build integrated capabilities. The net profit for 24-26 is estimated to be 6.7/8.2/990 million yuan, up 10%, 23%, and 21% year-on-year. The corresponding PE is 44/36/30 times, maintaining a “buy” rating.

Risk warning

Production capacity release and T/R component development fell short of expectations, and downstream equipment demand and base station construction fell short of expectations.