The company announced its 2024 annual report and 2025 quarterly report. In 2024, the company achieved revenue of 5.926 billion yuan (YoY +10.34%) and net profit of 0.822 billion yuan (YoY +65.03%). 25Q1 achieved revenue of 1.53 billion yuan (YoY +10.98%, QoQ +18.93%) and net profit to mother of 0.188 billion yuan (YoY +47.53%, QoQ -17.52%), in line with expectations.
The 2024 performance reached a record high, and each product line maintained a growing trend. The company's revenue and net profit reached record highs in 2024. The company's annual gross margin was 36.55%, YoY+0.38pct. The year-on-year improvement in gross margin was mainly due to reduced unit production costs through refined supply chain management and production process improvements. New products such as the new 6nm S905x5 series and the 8K chip S928X quickly opened up the market after commercialization, increasing overall profit margins. Starting from various product lines, S series: domestic operators continue to lead the tender share, the international market has broken through many developed countries/economies, and the global market share has expanded. In 2024, the number of S series chips shipped will exceed 8 million, covering more than 15 commercial chips. T series: Annual sales increased by 30% + year on year, completing full coverage of the mainstream international TV ecosystem, laying the foundation for overseas market expansion. AIoT and automotive electronics: The A311D2 chip has sold more than 100 square units, entering the North American and European markets, benefiting from the expansion of somatosensory game application scenarios, and automotive electronic chips entering supply chains such as BMW and Lincoln. Wi-Fi and 8K chips: Wi-Fi 6 chips sold 1.5 million+ throughout the year, achieving a breakthrough in the operator market; the 8K chip S928X had a full share of domestic tenders, and overseas orders were shipped at their own level. In terms of R&D expenses, the company's annual R&D expenses are 1.353 billion yuan (YoY +5.46%), and the R&D expenses rate is 22.83%.
2501 benefits from growing demand for smart home chips and overseas market expansion. The company's 25Q1 revenue reached a record high for the same period. The company's 25Q1 gross margin was 36.23% (+2.01pct year on year, -0.97pct month on month), and the net profit margin was 12.30% (+3.05pct year on year, -5.23pct month on month). The increase in gross margin was due to the release of new high-margin products, and net interest rate fluctuations were mainly affected by seasonal expenses. R&D investment continued. The company's 25Q1 R&D expenses were 0.359 billion yuan (+9.22% YoY, -1.5% month-on-month), and the R&D expenditure rate was 21.4%. It continued to focus on AIoT and automotive electronic chips, and high-intensity R&D investment supported the commercialization of new products. The company's cash flow from operating activities in a single quarter was 0.27 billion yuan (-9.15% year over year), mainly due to increased demand for stocking. In terms of product categories, sales of smart home chips increased 50% year-on-year, and shipments exceeded 10 million units in a single quarter.
Investment advice: With the company's deployment of AI chips on the end side, the expansion of robot scenarios, breakthroughs in smart cockpit chip technology and deepening cooperation with car companies, increasing the global market share of 6nm/8k chips, and the continuous release of orders from overseas operators and leading customers, we are optimistic that the company will benefit in the AIoT field in the long term. We expect the company's revenue in 2025-2027 to be 7.564/9.265/11.264 billion yuan, respectively, and the net profit to mother is 1.103/1.428/1.759 billion yuan, maintaining the “recommended” rating .
Risk warning: the risk of downstream demand falling short of expectations, the risk of increased market competition, and the risk of new product releases falling short of expectations.
