AFR(SZ:300620) Guotai Junan Securities·2024-04-07 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 56.00, up from the previous target of 54.00 [2][3]. Core Insights - The company has significantly increased its R&D investment, and the factory in Thailand is expected to commence production in the second half of the year [2][3]. - The demand for high-speed optical communication is robust, which is anticipated to drive revenue growth [2][3]. - The company's performance in 2023 was below expectations, with a notable increase in R&D expenditures impacting profitability [2][3]. Summary by Sections Financial Performance - The company's revenue for 2023 is projected at 7.09 billion, reflecting a year-on-year growth of 10.50%. However, the net profit attributable to the parent company is expected to decline by 49.38% to 0.60 billion [2][3]. - The report forecasts a net profit of 1.23 billion for 2024, a decrease of 7.8% compared to previous estimates [2][3]. Market Outlook - The demand for 400G/800G optical modules is expected to grow significantly, with the company's optical communication device business projected to benefit from this trend [2][3]. - The Thailand factory is expected to enhance the company's ability to penetrate overseas markets [2][3]. Product Development - The company is focusing on new products such as thin-film lithium niobate chips and autonomous driving laser radar, although these products are still in the customer validation and small batch production stages, which may pressure profit margins [2][3]. - The thin-film lithium niobate chip is expected to achieve domestic substitution in the high-speed modulator sector, leading to higher profit margins [2][3]. Financial Metrics - The report provides a financial summary indicating a projected operating profit of 108 million for 2024, recovering from a low of 35 million in 2023 [2][3]. - The company's net profit margin is expected to improve from 8.4% in 2023 to 11.9% in 2024 [2][3].