SICC CO.(SH:688234) Great Wall Securities·2024-05-21 05:02Investment Rating - The report upgrades the investment rating to "Buy" based on the expected growth in the company's performance and market position [5][12]. Core Views - The company achieved significant revenue growth in 2023, with a revenue of 1.251 billion yuan, representing a year-on-year increase of 199.9%. The net profit attributable to shareholders was -46 million yuan, improving by 74% year-on-year [1][2]. - In Q1 2024, the company reported a revenue of 426 million yuan, a year-on-year increase of 120.66%, and a net profit of 46 million yuan, marking a substantial turnaround from losses [1][2]. - The company is expanding its production capacity for conductive substrates, having achieved its 300,000-piece capacity target ahead of schedule, and is actively pursuing new customer contracts with major global semiconductor firms [5][2]. Financial Performance Summary - 2023 Financials: Revenue reached 1,251 million yuan, with a gross margin of 15.81%, an increase of 21.56 percentage points year-on-year. The net profit margin improved significantly, reflecting a reduction in operating expenses [2][5]. - 2024 Projections: Expected revenue for 2024 is projected at 2.3 billion yuan, with a net profit of 136 million yuan, indicating a growth rate of 397.7% compared to 2023 [1][5]. - Earnings Per Share (EPS): The EPS is expected to improve from -0.11 yuan in 2023 to 0.32 yuan in 2024, reflecting the company's recovery and growth trajectory [1][8]. Capacity and Market Position - The company has successfully ramped up production capacity for conductive substrates, with significant contracts signed with leading firms in the power semiconductor sector, enhancing its market share to one of the top three globally [5][2]. - The company is implementing a stock incentive plan to attract and retain talent, which is expected to further support its growth objectives and operational stability [2][5].