Kiwi Instruments(SH:688045) Southwest Securities·2024-03-31 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 34.20 CNY, reflecting a 36x PE for 2025 [1][15]. Core Insights - The company's main business has reached a bottom, and new products are expected to increase revenue. In 2023, the company achieved a revenue of 580 million CNY, a year-on-year increase of 10%, but reported a net profit loss of 19.07 million CNY, a decline of 150.2% year-on-year [1][15]. - The company continues to invest in R&D, with R&D expenses increasing by 38.2% to 160 million CNY in 2023, despite the profit decline [1][15]. Summary by Sections Performance Summary - In 2023, the company reported revenue of 580 million CNY, with AC-DC and driver IC segments generating 290 million CNY and 280 million CNY respectively, showing increases of 0.8% and 18.3% year-on-year [1][3]. - The gross margin was 23.6%, down 4.4 percentage points year-on-year, while the net margin was -6.3%, down 11.8 percentage points [1][3]. - The company’s expense ratios for sales, management, and R&D were 2.9%, 6.4%, and 27.5% respectively, with R&D expenses in absolute terms reaching 160 million CNY [1][3]. Business Outlook - The AC-DC segment is expected to continue growing in the home appliance sector, with a focus on enhancing product performance and reliability. The company is launching new products aimed at high-power applications [1][15]. - The general LED segment is under pressure due to macroeconomic factors, but the company plans to adjust its strategy to focus on mid-to-high power and smart LED products, which may improve profitability [1][15]. - The DC-DC and motor driver segments are anticipated to see significant growth, with the DC-DC segment's revenue increasing sixfold in 2023, and the motor driver segment expected to ramp up production in 2024 [1][15]. Financial Projections - Revenue projections for 2024-2026 are 760 million CNY, 960 million CNY, and 1.17 billion CNY respectively, with net profits expected to recover to 30.26 million CNY, 65.89 million CNY, and 107.53 million CNY [1][15]. - The company is expected to maintain a steady growth trajectory, with a projected gross margin improvement to 29.0% by 2026 [1][15].