events: the company released the 2023 performance forecast, 2023 the company is expected to achieve revenue of 1.325 billion yuan, year-on-year -20.70; The net profit loss attributable to the parent was 2.50-0.205 billion yuan, down 181.70-199.86 year on year. Net profit loss after deducting non-return is 3.45-0.282 billion yuan, down 266.60-303.63 year on year.

2023 industry demand pressure, the company focus on the long-term, committed to research and development investment, the overall profit decline.

the company's revenue declined in 2023, mainly due to the overall macroeconomic and semiconductor cycle downturn, as well as customer destocking behavior and other factors. The decline in the profit side is greater than the decline in the income side. The main reasons include: 1) The industry cycle is down, and the changes in the relationship between supply and demand have led to a decline in the company's gross profit margin; 2) The company pays attention to the accumulation of talents and technology in the industry's downward cycle, and continues to invest in research and development, market development, Supply chain system, quality management, talent construction and other aspects, period expenses and equity incentive expenses increase.

2023Q4 single-quarter net profit and non-net profit were positive, and revenue maintained growth month-on-month.

from 23Q4 alone, the company realized revenue of 0.324 billion yuan, up -17.87 year on year and up -16.83 month on month. Based on the forecast median, 23Q4 single-quarter company achieved a net profit of 0.023 billion yuan, up 172.86 percent YoY, up 119.60 percent month-on-month, while non-return net profit of 500000 yuan, also achieved three-digit growth in the same quarter. The company's 23Q4 revenue and profit increased month-on-month, we believe that the main reason is the company's new product release to improve the product structure, overlay downstream demand has recovered.

new product research and development steadily. The company has launched automotive magnetic current and high-current integrated magnetic current products, magnetic switches, magnetic wheel speed and other product direction research and development progress smoothly. Power management products, the company integrated a variety of protection functions of intelligent isolation drive to win many new energy customers recognized and large-scale shipment, functional safety of the main drive isolation drive product research and development is also smoothly advanced. 12-channel through-type taillight products have also been mass-produced, continue to release. Signal chain products, the company ASSP, MCU product research and development promotion smoothly, the original digital isolation, isolation interface, isolation sampling product line research and development promotion is also steadily advancing. We believe that as the company's new products continue to release, the proportion of revenue in key downstream areas such as automobiles is expected to further increase, contributing more robust long-term growth momentum to the company.

investment advice: we expect the company's net profit to be -2.33/0.07/0.273 billion yuan in 2023/2024/2025 respectively, corresponding to PE multiples of 2230.86/53.77 times in 2024/2025 respectively, maintaining the overweight rating.

Risk Warning: Industry demand is less than expected; new product development is less than expected; industry competition intensifies.