STI(SZ:300416) AVIC Securities·2024-04-29 01:30Investment Rating - The investment rating for the company is "Buy" with a target price of 18.00 CNY, maintaining the rating based on the company's performance and market opportunities [4][22]. Core Views - The company has shown consistent revenue growth, achieving 2.117 billion CNY in 2023, a year-on-year increase of 17.26%. The net profit attributable to the parent company was 314.27 million CNY, up 16.44% year-on-year [4][22]. - The company is expanding its market presence by enhancing its testing capabilities in the semiconductor and new energy sectors, which are expected to drive future revenue growth [22][31]. - The company is also investing in overseas markets, establishing laboratories in Thailand and other locations to broaden its service network [31][36]. Summary by Sections Financial Performance - In Q1 2024, the company reported revenue of 442 million CNY, a slight increase of 1.03% year-on-year, while the net profit was 42 million CNY, down 4.86% year-on-year. The gross margin was 42.47%, a decrease of 0.99 percentage points [4][30]. - For 2023, the company achieved a gross margin of 45.60% and a net margin of 17.42%, indicating stable profitability despite slight fluctuations [4][30]. Business Segments - The testing equipment segment generated revenue of 753 million CNY, growing by 23.00%, driven by technological advancements and market expansion [4][22]. - The testing services segment achieved revenue of 1.26 billion CNY, an increase of 15.52%, with environmental testing services contributing significantly to this growth [4][22]. - The integrated circuit verification and analysis services segment reported revenue of 257 million CNY, a modest increase of 2.34%, affected by increased operational costs due to capacity expansion [6][22]. Research and Development - The company has increased its R&D expenditure to 167 million CNY in 2023, a year-on-year growth of 23.91%, reflecting its commitment to innovation [8][22]. - The R&D expense ratio slightly increased to 7.87%, indicating a focus on enhancing product offerings and technological capabilities [8][22]. Market Outlook - The company is expected to benefit from the growing demand in the integrated circuit and new energy sectors, with projected revenues of 2.543 billion CNY, 3.073 billion CNY, and 3.694 billion CNY for 2024, 2025, and 2026, respectively [22][52]. - The net profit attributable to the parent company is forecasted to grow to 387.54 million CNY in 2024, 494.18 million CNY in 2025, and 608.40 million CNY in 2026, indicating strong growth potential [22][52].