Amlogic(SH:688099) SINOLINK SECURITIES·2024-04-11 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [3][12]. Core Insights - The company reported a revenue of 5.371 billion RMB in 2023, a decrease of 3.14% year-on-year, and a net profit of 498 million RMB, down 31.46% year-on-year. However, the first quarter of 2024 is expected to show significant recovery with an estimated revenue of approximately 1.378 billion RMB, representing a year-on-year growth of about 33.12%, and a net profit of around 125 million RMB, up 310.68% year-on-year [3][6]. - The company has been focusing on high R&D investment, with R&D expenses reaching 1.283 billion RMB in 2023, which is 23.9% of revenue, an increase from 21.4% in the previous year. This investment is expected to yield results with new product breakthroughs and market expansion anticipated in 2024 [3][6]. - The company’s gross margin showed a recovery trend in the second half of 2023, with Q4 gross margin at 39.1%. The first quarter of 2024 is expected to further improve profitability, with a net profit of approximately 166 million RMB after adjusting for stock-based compensation [3][6]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 5.371 billion RMB, with a revenue growth rate of -3.14%. The net profit was 498 million RMB, with a net profit growth rate of -31.46%. For 2024, the estimated revenue is projected to be 6.509 billion RMB, reflecting a growth rate of 21.19% [6][7]. - The diluted earnings per share for 2023 was 1.196 RMB, with an expected increase to 1.740 RMB in 2024 [6][7]. R&D and Product Development - The company invested 1.283 billion RMB in R&D in 2023, which is 23.9% of its revenue. This is a significant increase from the previous year's 21.4% [3][6]. - New product developments include a successful 6nm commercial chip and a new Wi-Fi product that supports multiple protocols, which are expected to enhance market competitiveness [3][6]. Profitability and Valuation - The report adjusts the company's net profit forecasts for 2024-2026 to 728 million RMB, 1.007 billion RMB, and 1.244 billion RMB, respectively, with corresponding P/E ratios of 26, 19, and 15 [3][6]. - The company’s gross margin is expected to stabilize and improve, with a projected gross margin of 37.4% in 2024 [3][6].