On April 16, Lixin Micro released its 2023 annual performance report. The company's products mainly include power management chips such as power conversion chips, power protection chips, display drive circuits, as well as other types of chips such as intelligent networking delay management units, high-precision Hall chips, and signal chain chips.
Net profit increased by 37.7% year-on-year
Lixin Micro achieved operating income of 887 million yuan, a year-on-year increase of 15.54%. It is worth noting that the growth rate of net profit and non-net profit outperformed revenue, and the company's net profit growth did not rely solely on revenue expansion, but gradually increased profitability.
The non-net profit increased by 37.68% year-on-year, and the operating income of Lixin Micro increased steadily, and the profitability of the main business increased. This is mainly due to the structural recovery of the global consumer electronics market, and the demand for the company's products from the company's main customer groups has increased compared with last year. In addition, the company has launched a series of new and upgraded products that closely meet the market demand, so that they can smoothly enter the market and generate sales.
Figure: 2023 Lixin Micro Annual Report
The government subsidy in 2023 will be 12.34 million yuan, a year-on-year increase of about one-third, the investment income will be 15.97 million yuan, a year-on-year increase of about one-quarter, and the non-operating income will be 22.97 million yuan. net profit was 201 million yuan, a year-on-year increase of 37.37%,
In 2023, affected by factors such as macroeconomy, semiconductor cycle, and geopolitical conflicts, the global semiconductor market will face greater pressure, and in 2023, the number of China's integrated circuit imports and exports will decline year-on-year, but the output of integrated circuits will increase. In 2023, Lixin Micro will perform well in this context, increasing revenue and profits.
The net cash flow from operating activities increased by 129.82% year-on-year, mainly due to the increase in the scale of sales and the increase in cash received from the corresponding sales of goods, the increase in government subsidies received compared with the previous year, and the significant decrease in cash for the purchase of goods and payment for labor services compared with the previous year.
Gross margin decreased by 1.17%
Due to the structural recovery of the international and domestic consumer electronics market, the demand for the company's products from major customers has further increased, the revenue has increased, and the overall gross profit margin has decreased by 1.17% due to the easing of production capacity and product structural adjustment, which is within a controllable range.
From the perspective of specific products, in 2023, the sales revenue of Lixin micro power protection chip products increased by 14.34% year-on-year, the cost of sales increased by 16.49% year-on-year, and the gross profit margin decreased by 1.05% year-on-year.
The sales revenue of power conversion chip products increased by 6.51% year-on-year, the cost of sales increased by 11.44% year-on-year, and the gross profit margin decreased by 2.48% year-on-year.
The sales revenue of signal chain chip products increased by 36.32% year-on-year, the cost of sales increased by 20.16% year-on-year, and the gross profit margin increased by 6.32% year-on-year.
The sales revenue of intelligent networking delay management unit products increased by 54.23% year-on-year, the cost of sales increased by 49.05% year-on-year, and the gross profit margin increased by 2.08% year-on-year, mainly due to the fact that the civil explosives industry is currently in the stage of industrial upgrading, and the business volume of the subsidiary SEMIKENTO digital detonator has increased significantly.
In terms of regions, domestic sales increased sharply in 2023, and the gross profit margin decreased by 2.08 percentage points year-on-year, mainly due to the further increase in domestic demand from large customers, the good introduction of new products, and the growth of domestic sales.
Figure: 2023 Lixin Micro Annual Report
It is worth noting that although the gross profit margin of Lixin Micro will decline slightly year-on-year in 2023, the net profit in 2023 will be 23.55%, a significant year-on-year increase, which is also an important factor for the company to outperform revenue in 2023 after deducting non-net profit.
Pictured: From a straight flush
The main reason for the increase in net profit margin is that the four major expenses (sales expenses, management expenses, R&D expenses, and financial expenses) will decrease as a whole in 2023, which indicates that the company's operating efficiency will improve to a certain extent.
Inventory 12.44% of total assets
In 2023, the inventory amount of Lixin Micro will be 182 million yuan, accounting for 12.44% of total assets. Lixin's inventory is mainly chips and wafers, and the company has invested large resources to ensure the security of the supply chain.
Raw materials and goods in stock account for a large proportion of inventory. Raw materials account for about 27% of the inventory, and in the face of revenue expansion, it is a correct and wise choice to stock up on Micro Pole, which can alleviate the negative impact of rising raw material prices in the future to a certain extent.
Figure: 2023 Lixin Micro Annual Report
The output of power protection chips of Lixin's main products was 741,837,600, with a production and sales rate of 99.52%, and the sales volume decreased by 3.35% over the previous year, the output of power conversion chips was 223,819.04 million, with a production and sales rate of 97.23%, and the sales volume increased by 34.35% over the previous year, the output of display driver chips was 100,112,700, with a production and sales rate of 94.63%, and the sales volume increased by 21.39% over the previous year, and the output of intelligent networking delay management units was 11,219.19 10,000 chips, with a production and sales rate of 34.44%, an increase of 102.97% over the previous year, signal chain chips with an output of 134,938,200, a production and sales rate of 102.16%, and a sales volume increase of 32.45% over the previous year, and other chips with an output of 57,796,600, a production and sales rate of 94.03%, with a sales volume increase of 28.71% over the previous year.
Inventory accounts for about 27% of the inventory value, and as a high-tech company, the overstock of product inventory is not good news. It may incur a loss on inventory decline, which will adversely affect the company's operating results.
Figure: 2023 Lixin Micro Annual Report
R&D expenses increased by 22.3297 million yuan year-on-year
In line with the idea of R&D and innovation as the cornerstone of development, Lixin Micro continues to promote the company's independent research and development in a planned manner. R&D expenses decreased by 0.35% year-on-year in 2023, mainly due to the failure of equity incentives to meet the assessment conditions in 2023, and the share-based payment was reversed to 8.9464 million yuan, excluding the factor of share-based payment, the R&D expenses in the current period increased by 22.3297 million yuan compared with the previous period.
In 2023, Lixin Micro will apply for 36 new patented technologies (including 22 invention patents), and obtain a total of 26 intellectual property projects (including 14 invention patents). As of December 31, 2023, the company has obtained a total of 148 intellectual property project authorizations (including 61 invention patents, 30 utility model patents, 1 design patent, 6 software copyrights, and 50 exclusive rights of integrated circuit layout design).
Figure: 2023 Lixin Micro Annual Report
At present, Lixin Micro products are widely used in the field of consumer electronics, and are actively expanding to diversified fields such as industrial control, medical equipment and automotive electronics. In view of the rapid update of downstream products, the market competition is extremely fierce.
In the international market, Lixin Micro has direct competition with world-renowned IC design companies such as TI, ON Semi, DIODES, Richtek and so on in specific fields, but there is a certain gap in market position, overall technical strength, sales scale, product completeness, etc.;