event: Stway released its 2023 annual report and 2024 quarterly report on the evening of April 26. in 2023, the company realized an income of 2.857 billion yuan (YoY +15.08%), a net profit of 0.014 billion yuan (year-on-year turnaround) and a net profit of 607400 yuan (year-on-year turnaround). For 4Q23 single quarter, the company achieved revenue of 1.084 billion yuan (YoY +30.9%,QoQ +54.89%), a record high in single quarter revenue, net profit of 0.08 billion yuan (YoY, QoQ +9120.14%) and net profit of 0.061 billion yuan (YoY, QoQ +1386.38%).

Q1 2024, the company achieved revenue of 0.837 billion yuan (YoY +84.31%,QoQ-22.78), the second highest level in single-quarter history, with net profit of 0.014 billion yuan (year-on-year, QoQ-82.4) and net profit of 0.02 billion yuan (year-on-year, QoQ-67.61).

"security + mobile + car" three arrows, product matrix continued to improve. In 2023, the company adheres to the development direction of "smart security and smart phones and automotive electronics", constantly optimize and improve the product matrix, and successfully build the second pole growth curve of high-order smartphone products. In 2023, the company's smart security revenue was 1.671 billion yuan (YoY +0.41%), accounting for 58.49 of the main revenue. Smartphone revenue was 0.892 billion yuan (YoY +50.4%), accounting for 31.21 of the main revenue. Automotive electronics revenue was 0.294 billion yuan (YoY +30.45%), accounting for 10.3 of the main revenue. In the field of smart security, the company continues to maintain its leading position in the global market with its perfect product matrix, excellent R & D strength and rapid response ability; in the field of smart phones, the cooperation between the company and existing customers in all levels of product fields continues to deepen, and the market share continues to increase, especially the successful mass production of a number of XS series 50 million pixel products, opening up a second growth curve for the company's revenue in the field of smart phones; in the field of automotive electronics, the company continues to deepen cooperation with a number of mainstream car manufacturers, the industry's solution capabilities and influence have been significantly improved, and the number of covered model projects has increased significantly.

smart phone high-end CIS products shipped smoothly, open up the second growth curve. In 2023, the company's smartphone CIS revenue achieved rapid growth, and the proportion of revenue continued to increase. At present, the company's mobile phone CIS product resolution has covered 800000 to 50 million pixel demand, and the company launched several for flagship machine main camera, auxiliary camera (including telephoto and wide angle) XS series of high-end products have been shipped on a large scale, successfully opening up a second growth curve for the company. In addition to 550XS and 520XS introduced in 2023, in January 2024, the company introduced the first 50 million pixel 1/1.28 inch CIS new product 580XS. This product uses 550XS' 22nmHKMG Stack process, with a single pixel size of 1.22 μm, and has the performance advantages of high dynamic range, low noise, 100 full pixel focusing, ultra-low power consumption, etc. It is mainly aimed at flagship smart phones.

investment advice: it is estimated that the company's net profit for 24-26 years will be 2.75/5.49/0.86 billion yuan respectively, and PE corresponding to the current price will be 71/36/23 times respectively. Taking into account the company's product competitiveness in the field of security monitoring, and continue to smart phones, car CIS and other fields of horizontal layout, to create the second growth pole, maintain the "recommend" rating.

risk tips: the risk of price fluctuations such as upstream foundry, the risk of increased competition in the industry, the risk of new product development and new market development is not as expected.