Earnings to mother grew at a high year-on-year rate in the first half of 2024, and breakthroughs continued in the segment. The company released a performance forecast. It is expected to achieve net profit of 159.5 million yuan to 195 million yuan in the first half year of 2024. Compared with the same period last year, it will increase 134.7 million yuan to 170.2 million yuan, an increase of 543.15% to 686.29% over the previous year. In the first half of 2024, market demand gradually recovered, and AIoT ushered in growth. Relying on the advantages of AIoT product layout, the company continues to penetrate various AIoT product lines and continues to break through in the fields of automotive electronics, machine vision, industrial applications, education and consumer electronics.

Maintain high R&D investment and focus on the end side for 24 years. The company maintained R&D investment accounting for about 20% of revenue for 10 consecutive years. The company said that in 2024, it will continue to focus on edge-side and end-side AIoT chips, promote the development of various new products such as AI coprocessors, high-end vision processors, next-generation economical vision processors, new general-purpose SoC processors, and audio amplifier chips, and continue to polish core IPs such as neural network processing, image vision processing, high-definition video codec, video post-processing, intelligent voice, and optical integration, as well as core algorithms such as AI vision and AI audio, and focus on developing automotive electronics, industrial and robotics applications, audio, AI tablets, etc. direction.

Profit forecasts and investment recommendations. We expect the company's corresponding EPS for 24-26 to be 0.87/1.33/1.67 yuan/share, respectively. Considering the valuation level of comparable companies, the 24-year PS valuation range is 12-13 times, corresponding to a reasonable value range of 77.65-84.12 yuan, and a “superior to the market” rating is given.

Risk warning. Product market promotion falls short of expectations, new business expansion falls short of expectations, and market competition intensifies