GONGJIN(SH:603118)2024-04-30 09:55Group 1: Product Orders and Sales Outlook - The company has successfully shipped 400G data center switches, with expected sales revenue in the tens of millions for 2023, and anticipates higher revenue for 800G switches, which are set to begin mass production by May 2024 [2] - The company aims to achieve over 100 million in revenue from high-end core routing products, with an average price exceeding 100,000 per unit [2] - The company is expanding its data center switch orders, particularly in North America and Japan, with initial breakthroughs expected in the Korean market [2] Group 2: Financial Performance and Market Conditions - The first quarter of 2024 showed a decline in performance, attributed to oversupply in the communication terminal industry, leading to a potential industry reshuffle [2][3] - The revenue from the data communication business decreased by approximately 400 million due to changes in accounting standards and inventory consumption [3] - The automotive electronics segment contributed around 160 million in revenue last year, with a target for higher contributions in 2024 [3] Group 3: Gross Margin and Cost Management - The company's gross margin has faced pressure, dropping from 9.43% in 2022 to 6.36% in 2023, primarily due to increased competition in low-end products and the introduction of higher-end products with lower margins [3][4] - The company is implementing cost control measures, including optimizing organizational structure and reducing internal expenses to enhance profitability [4] - The gross margin is expected to stabilize through increased overseas orders and the development of mid-to-high-end products [6] Group 4: Production Capacity and Supply Chain - The company has three production bases in China, focusing on high-end products, while a new facility in Vietnam will produce optical communication and wireless products [5] - The company is exploring additional production bases in Asia to meet market demands [5] - The collaboration with North American factories is aimed at preparing for mass production of PON and switches [4] Group 5: Market Trends and Future Prospects - The FTTR market is projected to grow significantly, with an expected shipment of nearly 2 million units in 2024, representing about 25% of the Chinese market [6] - The company is focusing on the development of white-box switches as a growth area in the coming years [7] - The automotive full optical network is anticipated to evolve, with significant potential for optical switching applications in vehicles [9]