On November 18, Everbright Securities released a research report saying that based on the performance of Aojie Technology (688220) in the third quarter, and considering that the company's 1602 and other product market competition is still continuing, and the lower selling price affects revenue, the company's 2024-2025 revenue forecast is lowered to 3.453 billion yuan and 4.517 billion yuan (down 1.48%/1.35%). The new 26-year revenue forecast is 5.823 billion yuan, corresponding to the current PS valuation of 4.9 times/3.8 times/2.9 times. Everbright Securities is optimistic about the company's competitiveness in cellular baseband chips and the development prospects of new categories such as smartphone chips and 5GRedcap, and maintains a "buy" rating.

In the third quarter of 2024, the company's revenue increased year-on-year, but the gross profit margin was under pressure, mainly due to the significant increase in the sales volume of chip products, but the customized services and IP licensing business with relatively high gross profit margin recognized less revenue in the current period; In the third quarter of 2024, the company's R&D expenses were 310 million yuan (+19.86% year-on-year and +11.16% quarter-on-quarter), and the R&D growth was mainly due to the increase in share-based payment expenses and the increase in tape-out project expenses. In the third quarter of 2024, the company's selling/administrative/R&D expense ratios were 0.85%/3.48%/35.00% (-0.15/-0.99/+2.19% year-on-year).

The recovery of AIoT demand and the company's category development have led to steady growth in the company's revenue. Children's watches have a strong performance in the global market, with in-depth cooperation with brands such as Philips; Adult watches have deepened cooperation with mainstream brands around the world, and are active in Europe, Latin America, Southeast Asia and other markets. In the first half of 2024, the company's LTECat.4 vehicle front-loading solution shipments increased significantly year-on-year, and the sales scale of single products has reached one million, and it is expected that the shipment volume will exceed two million in 24 years, and the shipments of WiFi+BLECombo chips in many white power head enterprises, including Midea and Haier, have increased steadily.

The shipment of 4-core products is stable, the progress of 8-core products is progressing smoothly, and the commercialization of Redcap is imminent, contributing to new revenue growth points. The company's first smartphone chip ASR8601 has been successfully shipped, and at least 5 smartphones have adopted this chip, and the expansion of new models and new customers is also steadily advancing. In addition to smart phones, in the fields of smart watches, smart tablets, children's learning machines, etc., 8601 is also steadily advancing, and it is expected that by the end of the year, the total shipment of the chip may exceed one million. At the same time, the company's 8-core 4G chip is expected to enter the customer introduction stage by the end of this year, and next year it is expected to launch 8-core 2nd generation 4G mobile phone chip and 5GRedCap smart terminal chip to contribute to new revenue growth.