23-year performance remained steady, and profitability increased year-on-year
In 2023, Guobo Electronics achieved revenue of 3,567 billion yuan (yoy +3.08%), net profit of 606 million yuan (yoy +16.47%), net profit of 571 million yuan (yoy +15.38%); in Q1 2024, revenue of 693 million yuan (yoy -0.62%) and net profit of 121 million yuan (yoy +4.22%). Considering the slowdown in demand for RF devices at the company's downstream base stations, we expect net profit for 24-26 to be 6.44/8.49/1,060 million yuan (24-25 previous value: 7.68/974 million yuan), which is comparable to the company Wind's average expectations for PE45x. Considering the high growth of the company's military T/R components and the scarcity of civilian RF chips, we gave the 24-year target PE57x, corresponding to a target price of 91.79 yuan/share, maintaining the “gain” rating.
The T/R component business grew steadily, and the commercial RF chip sector continued to break through the company's T/R module business revenue of 3.379 billion yuan in 23 years, +7.64% over the same period. The company actively expanded the application field of T/R components, and various products in the low-orbit satellite and commercial aerospace fields have begun to be delivered to customers; RF modules continue to iterate products and launch a new generation of metal-ceramic-encapsulated GaN RF modules and plastic PAMs. In '23, the company's RF chip business had revenue of 128 million yuan, compared to -52.98%. The company had strong demand for high-linear control components for next-generation smart antennas at base stations. It shipped RF front-end modules for drones in batches, and promoted product promotion of amplification chips such as WiFi and mobile phone PA, as well as control chips such as RF switches and antenna tuners in the field of mobile communication terminals.
Product profitability increased year-on-year, and the cost rate level remained stable
In 2023, the company's comprehensive gross profit margin was 32.28%, +1.61pct year on year, net profit margin 17.00%, +1.95pct year on year; 1Q24 gross profit margin 35.63%, year-on-year +3.88pct, net profit margin 17.42%, year-on-year 0.81 pct. We judge that the increase in gross margin may be due to an increase in the application ratio of the company's self-developed chips. As this ratio increases, the company's gross margin is expected to continue to improve. The company's 23-year sales/management/ financial/ R&D expense ratios were 0.27%/3.60%/-0.62%/9.86%, respectively, -0.02/+1.22/ -0.53/-0.12pct, respectively. The increase in management expenses was mainly due to an increase in depreciation and amortization expenses, and the slight decrease in R&D expenses was mainly due to an increase in revenue scale.
Maintain an “increase in holdings” rating
Considering the slowdown in demand for RF devices at the company's downstream base stations, we expect net profit for 24-26 to be 6.44/8.49/1,060 million yuan (24-25 previous value: 7.68/974 million yuan), which is comparable to the company Wind's average expectations for PE45x. Considering the high growth of the company's military T/R components and the scarcity of civilian RF chips, we gave the 24-year target PE57x, corresponding to a target price of 91.79 yuan/share, maintaining the “gain” rating.
Risk warning: major customer dependency risk; inventory impairment risk; cash flow risk.