Accelerated penetration of AIPC is expected to drive the company's revenue growth
Zhiwei Intelligent released its annual report, and in 2023, it will achieve a revenue of 3.665 billion yuan (yoy+20.86%), a net profit attributable to the parent of 32.8114 million yuan (yoy-72.45%), and a non net profit of 26.243 million yuan (yoy-77.52%).
In Q4, the revenue was 886 million yuan (yoy-4.25%), and the net profit attributable to the parent company was 1.4809 million yuan (yoy-92.31%). Considering that the company's ICT business with low gross profit margin and the procurement pace of downstream industries are delayed, the company's profit forecast is lowered. It is estimated that the company's EPS in 24-26 will be 0.58 yuan, 0.86 yuan and 1.21 yuan respectively (1.08 yuan and 1.35 yuan before 24-25 years). In consideration of AIPC's high volume or postponement to 25 years, the 25 year performance is taken as the valuation basis. The average price of comparable companies is 25E 28.3xPE. Considering that the EPS CAGR of the company in 24-25 years is 157%, higher than the average of comparable companies by 7%, the company will be given 25E 37.5xPE, corresponding to the target price of 32.25 yuan (the previous value is 27.64 yuan), "buy".
Share based payment dragged down 24Q1 net profit attributable to the parent company, and the annual recovery is expected
24Q1 achieved a revenue of 714 million yuan (yoy-10.37%), with a year-on-year decline in revenue, which is expected to be mainly due to the slower pace of demand in the downstream market. In 24Q1, the net profit attributable to the parent company was 12.8842 million yuan (yoy-64.13%), and the non net profit deducted was 7.9416 million yuan (yoy-76.96%). The net profit attributable to the parent company declined significantly year on year, mainly because: 1) the increase in the number of employees led to rigid expenses; 2) 24Q1 Share based payment expense was 11.78 million yuan, net profit attributable to parent company after excluding payment expense was -41.14% year on year. We believe that with the gradual recovery of the downstream market environment, the growth rate of the company's annual profit attributable to the parent company is expected to return to normal.
High volume of industrial IoT sector is expected to drive the improvement of gross profit margin
In 2023, the company's industrial terminals, ICT infrastructure, industrial Internet of Things and other businesses will achieve revenues of RMB 2.506 billion, 684 million, 102 million and 373 million respectively,+33.54%, - 18.33%,+76.03% and+43.38% year on year. Among them, the revenue of industrial Internet of Things business grew rapidly year on year, which is expected to be driven by the company's efforts to promote the "smart micro industry" brand, and industrial personal computers, switches, machine vision controllers and other products. We believe that as the company continues to increase its own brand expansion efforts, the volume of industrial IoT products is expected to drive the company's gross profit margin to continue to improve.
AIPC's accelerated penetration is expected to drive the company's revenue growth
We believe that the penetration rate of AIPC is expected to gradually increase as Intel, Qualcomm and other chip manufacturers successively release new AIPC chip products. According to IDC, the penetration rate of AI PC in China will reach 55%, 75%, 80% and 85% respectively from 2024 to 2027. At the same time, the company is actively distributing AIPC products. In March 2024, the company released new products such as MiniPC, AIO, OPS-C module based on Intel Core Ultra, and AIPC product line continued to expand. In addition, the company actively embraces the underlying capabilities of domestic OS. On December 10, 2023, the company released the Announcement on Signing a Cooperative Development Agreement with China Soft International to jointly create open source Hongmeng IoT terminals and computer products with China Soft International. We believe that the company is expected to benefit from the opportunities of AIPC industry and achieve sustained revenue growth.
Risk warning: macroeconomic fluctuations; Downstream demand is less than expected.
