Bestechnic (Shanghai) (SH:688608) Orient Securities·2024-04-25 13:32Investment Rating - The report maintains a "Buy" rating for the company with a target price of 138.47 CNY based on a 61x PE valuation for 2024 [2][5][10]. Core Insights - The company reported a revenue of approximately 2.18 billion CNY for 2023, a year-on-year increase of about 47%, achieving a historical high. The net profit attributable to the parent company was 124 million CNY, a 1% increase year-on-year. The net cash flow from operating activities turned positive at 470 million CNY [1]. - In Q1 2024, the company achieved a revenue of 653 million CNY, a 70% year-on-year increase, and a net profit of 28 million CNY, marking a turnaround from losses [1]. - The earphone market is recovering, with a doubling in sales of smart Bluetooth chips. The global TWS earphone shipment increased by 2% to 294 million units in 2023, while the domestic market grew by 5% to 61 million units. The company's sales of ordinary Bluetooth chips rose by 11% to 88.69 million units, and smart Bluetooth chip sales surged by 99% to 71.81 million units [1]. - The wearable sector is rapidly increasing its market share, expanding into new clients and wristband markets. The BES2700 series based on 12nm FinFET technology has quickly ramped up production, extending applications to smartwatches and smart glasses [1]. - The company has achieved mass production of Wi-Fi 6 chips, expanding into new smart home scenarios. The integration of Wi-Fi and TWS technologies has led to the development of low-latency multi-box technology for high-quality audio transmission [1]. - Continuous investment in R&D has led to the successful tape-out of the next-generation 6nm wearable chip, BES2800, expected to enter mass production in 2024. This chip features significant improvements in CPU and NPU performance, enhancing algorithm execution speed and reducing power consumption [1]. Financial Summary - The company’s revenue for 2023 was 2,176 million CNY, with a year-on-year growth of 47%. The projected revenues for 2024, 2025, and 2026 are 2,807 million CNY, 3,556 million CNY, and 4,438 million CNY, respectively, with growth rates of 29%, 27%, and 25% [4]. - The net profit attributable to the parent company for 2023 was 124 million CNY, with projections of 273 million CNY, 405 million CNY, and 580 million CNY for the following years [4]. - The report indicates a decrease in gross margin from 39.4% in 2022 to 34.2% in 2023, with a gradual recovery projected to 37.1% by 2026 [4].