Investment Highlights

On January 17, 2025, NOVOSENSE released its 2024 annual performance forecast.

24Q4 performance is expected to continue to improve, net profit attributable to the parent is expected to decrease month-on-month The company is expected to achieve revenue of 19~2 billion yuan in 2024, a year-on-year increase of 44.94%~52.56%, mainly due to 1) benefiting from the steady growth of demand in the downstream automotive electronics field, the company's related products in the field of automotive electronics continue to increase, and it is expected that the annual automotive chip shipments will exceed 270 million, and the revenue of the automotive business will account for more than 35%; 2) The prosperity of the consumer electronics field continues to improve; 3) Most customers in the field of industrial automation and digital power in the pan-energy field have returned to normal demand. It is estimated that the net profit attributable to the parent company will be -4.4~-360 million yuan, a year-on-year decrease of 55~135 million yuan; It is estimated that the net profit of non-attributable to the parent company will be -4.9~-410 million yuan, a year-on-year decrease of 0.17~97 million yuan. The pressure on profits was mainly due to the overall macro economy and the intensification of market competition, the company's product prices were under pressure, and the gross profit margin decreased year-on-year.

In addition, the company's amortized share-based payment expenses in 2024 will be about 68 million yuan, a year-on-year decrease of about 69.44%. The Company is expected to be unable to complete the company-level performance appraisal set by the relevant restricted stock incentive plan in 2024, and accordingly reversed the corresponding cumulative recognized share-based payment expenses of approximately RMB201 million. In 2024, the company will make a total of 103 million yuan of impairment provisions, of which 86 million yuan will be newly provided for inventory decline.

In a single quarter, the company is expected to achieve revenue of 534 million ~ 634 million yuan in 24Q4, a year-on-year increase of 72.20% ~ 104.45%, and a month-on-month increase of 3.27% ~ 22.61%; It is estimated that the net profit attributable to the parent company will be -32~48 million yuan, and the net profit not attributable to the parent company will be -0.49~31 million yuan, which will be a month-on-month loss.

The company focuses on high-performance and high-reliability analog and mixed-signal chips, focusing on three major product directions: sensors, signal chain and power management, which are widely used in automotive, pan-energy and consumer electronics. According to the November 2024 investor survey minutes, the company said that if all the products currently planned or under development can be successfully mass-produced, the value of the mass-produced products can reach 3,000 yuan.

The company's product layout in the automotive market has expanded from the initial new energy vehicle three-electric and automotive lighting applications to body domain control and fuel vehicle power systems, and the new mass production business covers thermal management, battery packs, intelligent cockpits and other applications. Products such as automotive headlight lighting LED drivers, ambient lighting driver SoCs, ABS wheel speed sensors with functional safety features, automotive SerDes video interfaces, automotive audio amplifiers, and automotive PMICs/SBCs are expected to be introduced to the market as early as 2025. The company said that the value of the magnetic sensor of electric vehicles is about 40~60 US dollars. The company completed its layout in the field of magnetic sensors through the acquisition of McGonn; In December 2024, the company has completed the change registration of McGoun for industry and commerce, and the company and its wholly-owned subsidiary, Naxing Investment, directly and indirectly hold 100% of the shares of McGoun. In October 2024, the company and Continental announced a strategic collaboration to jointly develop automotive pressure sensor chips for safer and more reliable automotive airbags, automotive side impact monitoring, and battery pack collision detection systems.

In November 2024, the company launched the NS800RT series of real-time control MCUs in conjunction with Xinxin. The core application scenarios of the NS800RT series MCUs include photovoltaic/energy storage inverters, uninterruptible power supplies, industrial automation, collaborative robots, new energy vehicles, air conditioning compressors, etc. With more efficient and powerful real-time control capabilities and a wide range of peripherals, the NS800RT series can achieve picosecond-level PWM control, significantly improving the accuracy and efficiency of system operation. Song Kunpeng, marketing director of the company's MCU, said that the company's entry into the track is mainly due to 1) real-time control MCU has very high requirements for quality, performance, supply guarantee and other aspects, and the localization rate is far lower than the average localization rate of 10% of automotive chips, which can avoid homogeneous competition; 2) The real-time MCU can be coordinated with the company's original analog product line to solve systematic problems for customers at the system level.

Investment advice: According to the company's 2024 performance forecast, and considering that the company's high-end automotive products are about to be large-scale, we adjust the previous performance forecast for the company. It is estimated that from 2024 to 2026, the company's revenue will be 19.20/28.42/3.581 billion yuan (the previous value was 18.81/25.89/3.137 billion yuan), and the growth rate will be 46.5%/48.0%/26.0% respectively; The net profit attributable to the parent company was -3.99/0.35/202 million yuan (the previous value was -2.90/0.27/127 million yuan), and the growth rate was -30.6%/108.7%/482.4% respectively. The company has formed a number of core technologies in many fields such as sensors, signal chains, power supplies and drives, and third-generation power semiconductors. Continue to recommend and maintain an "overweight" rating.

Risk warning: the risk that the demand of the downstream terminal market is less than expected, the risk that new technologies, new processes and new products cannot be industrialized as scheduled, the risk of intensified market competition, and the risk of systemic risk.