Loongson Technology(SH:688047) Guoxin Securities·2024-05-17 06:30Investment Rating - The report assigns a "Buy" rating to the company [4]. Core Views - The company is a leading domestic processor manufacturer, facing short-term revenue and profit pressure in 2023 due to industry cycles and macroeconomic conditions [1][5]. - The company has launched the new generation of the Loongson 3A6000 processor, marking a significant milestone in the domestic desktop CPU sector [1]. - The report anticipates gradual improvement in the company's business due to cyclical changes in the industry and the growth potential from new information technology chip products [1]. Summary by Sections Financial Performance - In 2023, the company reported revenue of 506 million yuan, a year-on-year decrease of 31.54%. The net profit attributable to shareholders was -329 million yuan, a decline of 736.57% year-on-year [1][2]. - The gross margin for 2023 was 36.06%, down 11.03 percentage points from the previous year, primarily due to decreased sales of information technology chips [1][17]. - The company expects revenues of 705 million yuan, 1.014 billion yuan, and 1.36 billion yuan for 2024, 2025, and 2026, respectively [2]. Product Segmentation - The company's products are categorized into industrial control chips, information technology chips, and solution services. In 2023, industrial control chip revenue was 162 million yuan, accounting for 32.0% of total revenue, while information technology chip revenue was 92 million yuan, accounting for 18.1% [1][18]. - The gross margin for industrial control chips was 67.49%, while for information technology chips, it was only 5.30% [18]. Market Position and Technology - The company has developed its own instruction set architecture, LoongArch, which is independent of Wintel and AA systems, and has established a comprehensive ecosystem for hardware and software solutions [1][20]. - The performance of the Loongson CPU series is approaching that of mainstream market products, with the latest models demonstrating competitive capabilities [27]. Future Outlook - The report projects a recovery in the company's business performance as the industry cycle improves and new product launches in the information technology sector drive growth [1][5].