1H24 results are in line with market expectations
The company announced 1H24 results: operating income of 0.118 billion yuan, +6.08% year over year; realized net profit of 0.006 billion yuan, -83.21% year over year; loss after deduction of 0.6056 million yuan. Looking at a single quarter, 2Q24 achieved operating income of 0.064 billion yuan, -7.82% year-on-year, and +19.04% month-on-month; net profit to mother was 0.011 billion yuan, or -56.99% year-on-year, turning a month-on-month loss into a profit. The results are in line with market expectations.
Development trends
Revenue is growing steadily, and new product iterations are progressing steadily. By product, 1) RF transceiver chips and high-speed high-precision ADC/DAC chips achieved revenue of 0.047 billion yuan, compared to -11.34%. The company developed a variety of new products for the next generation of low-orbit commercial satellites and ground supporting equipment. During the reporting period, three anti-irradiated satellite products completed the flow film and were in the backfilm testing and sample delivery stage; 2) The power management chip achieved revenue of 0.052 billion yuan, compared to +35.86%. The company actively promoted new product development and product iteration to help the company's product coverage increase in the satellite industry; 3) micro The system and module achieved revenue of 0.015 billion yuan, +47.47% over the same period. The company has delivered various products to customers in the satellite industry chain in small batches. The company expects that from 2H24 to 2025, satellites carrying the company's microsystems and module products can complete launch and work in orbit.
Product gross margins remain high, and we insist on R&D to build technical advantages. 1) The company's 1H24 gross margin was 4.64ppt to 85.17% year on year. The gross margin remained high. The year-on-year adjustments were mainly due to product restructuring and increased manufacturing costs due to the commissioning of new office buildings. The net profit margin of 1H24 was 25.38ppt to 4.77% year over year, mainly due to expansion on the cost side. 2) The company's cost rate during the 1H24 period was +16.71ppt to 68.07%, of which the R&D cost rate was +10.52ppt to 56.98% year over year. During the reporting period, new products were developed and finalized in the fields of various satellites, digital array radars, underwater exploration, etc. We believe that the company's adherence to high-intensity R&D investment is expected to strengthen the company's leading edge in the field of high-end analog chips and inject long-term development momentum into the company.
Deeply involved in special RF analog chips, it is expected to benefit from the development of the satellite industry and the improvement in the level of informatization and localization of special equipment. 1) The company is one of the few domestic enterprises that can provide special RF analog chip solutions. The products are widely used in information technology equipment such as satellite internet, data links, communication terminals, phased arrays, etc.; 2) The company closely follows the low-orbit satellite industry trend, and various power management chips have been applied in the stars. The size and weight of the newly developed SiP product is 90% lower than the traditional solution. We believe that the improvement in the informatization of special equipment and localization of core devices is expected to help the company grow in the long term; the company closely follows trends in the satellite industry and is expected to share the dividends of the low-orbit satellite constellation industry with technical barriers and first-mover advantages.
Profit forecasting and valuation
Considering the company's product iteration and demand release pace, we lowered the company's 2024/2025 net profit forecast by 23.3%/21.0% to 0.091/0.151 billion yuan. The current stock price corresponds to 2024/2025 49.3/29.7xp/E. We are optimistic about the company's leading edge in the analog chip field, maintain the industry rating, and consider the downward shift in the industry valuation center. We lowered the target price by 44% to 25.80 yuan (after exclusion), corresponding to 36.7x P/E in 2025, with a potential increase of 23%.
risks
Macroenvironmental and policy risks; order delivery falls short of expectations.