MICROGATE(SZ:300319) Guotou Securities·2024-05-05 10:09Investment Rating - The investment rating for the company is "Buy-A" with a target price of 9.70 CNY, maintaining the rating [4][13]. Core Views - The company reported a revenue of 3.017 billion CNY in 2023, a decrease of 4.28% year-on-year, while the net profit attributable to shareholders increased by 35.07% to 270 million CNY [6]. - The first quarter of 2024 saw a revenue of 676 million CNY, a slight increase of 0.65% year-on-year, and a net profit of 62 million CNY, up 32.48% year-on-year [6]. - The recovery in consumer electronics demand is expected to improve profitability, driven by inventory replenishment and new product launches [7]. - The company is actively embracing the automotive and new energy markets, accelerating its integration within the supply chain [8]. Financial Performance Summary - The company achieved a revenue of 15.57 billion CNY in the electronic components sector in 2023, with a gross margin of 24.27% [8]. - The projected revenues for 2024, 2025, and 2026 are 3.297 billion CNY, 3.688 billion CNY, and 4.060 billion CNY, respectively, with net profits of 337 million CNY, 384 million CNY, and 434 million CNY [13][14]. - The company’s net profit margin is expected to improve from 8.9% in 2023 to 10.2% in 2024 [14]. Market Position and Strategy - The company plans to build a complete supply chain for soft magnetic materials, inductors, and transformers, responding to customer demands from major clients like BYD and others [8]. - The company is also focusing on the RF components sector, aiming to establish a supply chain for RF materials and filters [8]. - The company’s cost control measures have led to a decrease in the expense ratio from 4.4% in Q1 2023 to 3.2% in Q1 2024, while the net profit margin increased from 7.0% to 9.2% in the same period [7].