Vanchip (Tianjin) Technology (688153) GF SECURITIES·2024-04-30 01:32Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 64.84 CNY per share based on a 70x P/E valuation for 2024 [3]. Core Insights - The company reported a strong increase in gross margin in Q1 2024, with a gross margin of 28.07%, up 5.08 percentage points from the previous quarter. The revenue for Q1 2024 reached 4.61 billion CNY, a year-on-year increase of 45.06%. The net profit attributable to shareholders was a loss of 5.37 million CNY, which represents a significant reduction in losses compared to the same period last year [1][2]. - The year 2023 marked a comprehensive expansion of the company's product lines, with expectations for significant volume growth in 2024. New products such as L-PAMiD, Wi-Fi, and satellite communication modules are progressing well in client production [1]. - Earnings forecasts for the company indicate EPS of 0.93, 1.22, and 1.54 CNY per share for 2024, 2025, and 2026, respectively, reflecting strong growth potential driven by new product launches [2][8]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 2.98 billion CNY, a year-on-year growth of 30.32%, and a net profit of 112 million CNY, up 110.31% from the previous year. The revenue for 2024 is projected to be 3.70 billion CNY, with a growth rate of 24.2% [2][8]. - The EBITDA for 2023 was 202 million CNY, with projections of 449 million CNY for 2024 [2]. Product Development - The company has successfully introduced several new products, including L-PAMiD and low-voltage L-PAMiF, which are expected to drive growth in 2024. The revenue from the receiving end products reached 3.47 billion CNY in 2023, showing double-digit growth [1][2]. - The full suite of 5G automotive-grade products has passed client validation and is expected to see large-scale shipments in 2024 [1]. Valuation Metrics - The report provides a P/E ratio of 242.59 for 2023, with a projected decrease to 56.98 for 2024, indicating an expected improvement in profitability as new products gain traction [2][8]. - The company's return on equity (ROE) is projected to increase from 2.8% in 2023 to 8.7% in 2024, reflecting enhanced profitability [2][8].