SANAN(600703) 长江证券·2024-05-14 03:02Investment Rating - The report maintains a "Buy" rating for Sanan Optoelectronics (600703 SH) [4] Core Views - Sanan Optoelectronics demonstrated resilience in 2023 despite challenging global economic conditions, achieving a revenue of 14 053 billion yuan, a year-on-year increase of 6 28% However, net profit attributable to the parent company decreased by 46 50% to 367 million yuan [5] - In Q1 2024, the company reported revenue of 3 557 billion yuan, up 22 33% year-on-year, but net profit attributable to the parent company fell by 44 39% to 119 million yuan The non-GAAP net profit loss narrowed significantly to -32 million yuan [5] - The company's LED and semiconductor RF businesses are showing signs of recovery, with product structure optimization and increased high-end product contributions expected to improve profitability [5] - The semiconductor power electronics business is progressing steadily, with significant developments in silicon carbide (SiC) and gallium nitride (GaN) technologies, positioning the company for long-term growth [6] Business Performance and Outlook LED Business - LED epitaxial chip revenue increased by 6 3% year-on-year in 2023, with traditional LED revenue up 3 91% and high-end LED revenue up 13 99% [5] - The company is benefiting from improved equipment utilization and higher-value product offerings, which are expected to enhance profitability [5] Semiconductor RF Business - The second-generation GaN RF high-power base station products achieved mass production in October 2023, with international business making breakthrough progress [5] - Gallium arsenide (GaAs) RF foundry utilization exceeded 85% in the second half of 2023, driven by recovering downstream demand [5] - Filter production capacity utilization reached 50% by the end of 2023, with wafer-level packaging (WLP) filters for high-end smartphones successfully entering mass production [5] Semiconductor Power Electronics - Hunan Sanan's SiC production capacity reached 16 000 wafers per month, with over 800 customers expressing interest [6] - The company has achieved batch shipments of 6-inch SiC substrates to international customers and is sampling 8-inch substrates to key overseas clients [6] - The 1200V 16mΩ SiC MOSFET for electric vehicle main drives has passed AEC-Q101 reliability standards and is undergoing module validation with key new energy vehicle customers [6] - Joint ventures with STMicroelectronics and Li Auto are progressing, with production expected to ramp up in 2024 and 2025 [6] Financial Projections - Revenue is projected to grow from 18 831 billion yuan in 2024 to 27 856 billion yuan in 2026 [6] - Net profit attributable to the parent company is expected to increase from 1 064 billion yuan in 2024 to 2 603 billion yuan in 2026 [6] - The company's PE ratio is forecasted to decline from 59X in 2023 to 24X in 2025, reflecting improving profitability [6] Key Financial Metrics - Current stock price: 12 51 yuan (as of May 10, 2024) [7] - Total shares outstanding: 4 989 02 million [7] - Earnings per share (EPS) is projected to grow from 0 07 yuan in 2023 to 0 52 yuan in 2026 [10]