On the evening of April 29, Lingyi Zhizao (002600) disclosed its 2023 annual report and 2024 first quarter report. In 2023, the company will achieve operating income of 34.124 billion yuan, net profit attributable to shareholders of listed companies of 2.051 billion yuan, a year-on-year increase of 28.50%, non-net profit attributable to shareholders of listed companies of 1.693 billion yuan, a year-on-year increase of 13.3%, net operating cash inflow of 5.295 billion yuan, a year-on-year increase of 28.38%, and basic earnings per share of 0.29 yuan/share, a year-on-year increase of 26.09%. In 2023, the company will focus on the core hardware business of AI terminals, of which the revenue of terminal-related components such as XR, folding screen mobile phones, servers, and robots will grow rapidly, and the revenue of new energy vehicles and photovoltaic energy storage business will grow significantly. The company's overall profitability has been greatly improved, focusing on innovation, diversified business development, and lean production.
In the first quarter of 2024, the company achieved operating income of 9.799 billion yuan, a year-on-year increase of 35.83%; The net profit attributable to shareholders of the listed company was 461 million yuan, and the net profit attributable to shareholders of the listed company was 352 million yuan.
It is worth noting that Lingyi Zhizao adheres to the investor-oriented principle and attaches great importance to the reasonable return on investment for investors. In addition, the board of directors deliberated and approved the company's cash dividend of 210 million yuan in 2023, and the cumulative dividend amount in 2023 will reach 420 million yuan, accounting for 20.5% of the annual net profit. In terms of repurchase, the company has repurchased a total of 300 million yuan so far in 2022, and will continue to use 0.5-100 million yuan to repurchase the company's shares to safeguard the interests of investors with practical actions.
AI terminal hardware opens up the situation and the revenue of core components is growing rapidly
In 2023, global artificial intelligence (AI) technology has made breakthroughs, leading a technological revolution in the field of generative AI, and terminal hardware is expected to become an AI entry point in the development. Lingyi Intelligent Manufacturing actively lays out the field of AI terminal hardware, transforming and upgrading from a consumer electronics intelligent manufacturing manufacturer to an AI terminal hardware manufacturing platform, providing R&D, design, production, sales and solutions of core components in the upstream of the AI terminal hardware industry chain.
In 2023, Lingyi Intelligent Manufacturing AI terminals and communication-related products will achieve revenue of about 30.687 billion yuan, with a gross profit margin of about 21.62%. Among them, the revenue of components such as power supply, battery, heat dissipation, display, camera, and middle frame accounted for a relatively high proportion, and the revenue of terminal-related components such as XR, folding screen mobile phones, servers, and robots grew rapidly. The company has shown a significant competitive advantage in the fierce competition in the era of consumer electronics stock.
In the future, the enrichment of artificial intelligence terminal application scenarios and the innovation of artificial intelligence large model interaction forms will promote the increase in the demand for artificial intelligence terminal products and the upgrading of hardware such as heat dissipation, chargers, storage, and screens, and the industry is expected to usher in new opportunities for development. With the increasing demand for AI computing power in terminal products, the demand for high-intensity and high-precision computing has generated various practical problems of heat generation and heat dissipation. The iteration of heat dissipation technology is accelerating, and high-end heat dissipation solutions will become the "hard core demand" of AI terminals. In terms of heat dissipation, Lingyi Intelligent Manufacturing has the research and development, production capacity and systematic heat dissipation solutions of heat pipes, vapor chambers and other heat dissipation components, air-cooled heat dissipation modules, water-cooled modules, graphite sheets, thermal pads, and thermal conductive adhesive related products. The company's stainless steel ultra-thin VC vapor chamber and heat dissipation solutions have been installed in a variety of mid-to-high-end mobile phone models and achieved mass production and shipment.
In terms of smart phones, folding screen mobile phones have become a new growth point and important development opportunity in the current smartphone market due to their high technical threshold and high value-added attributes. The company conforms to the development trend of lightweight and performance optimization of high-end folding screen mobile phones, and actively uses new material carbon fiber for the design, research and development and production of folding screen structural parts. As a key part of the screen support plate, the carbon fiber screen bracket has high strength, low density, good modulus, and has the characteristics of good electrical conductivity and heat dissipation. Counterpoint predicts that the global market share of folding screen phones in the high-end mobile phone segment will reach 8% in 2023, and the global market share of folding screen phones in the high-end mobile phone segment is expected to reach 39% in 2027.
In terms of smart wearables, the company provides core components such as soft functional parts, injection molded parts, heat dissipation solutions, and chargers for leading customers in the global XR field. IDC, an international research organization, predicts that global virtual reality device shipments will enter a period of rapid growth, and XR devices will maintain a growth rate of more than 30% in the next few years, and the shipment volume will reach 35.1 million units by 2026. With breakthroughs in related technologies, a rich content ecosystem, and improvements in consumer experience, XR products are likely to become more popular. The company is expected to continue to benefit and open up room for profit improvement.
Lean production improves quality and efficiency, and empowers AI terminal business innovation
After years of precipitation, the concept and action of lean production run through the whole process of production and operation of Lingyi Intelligent Manufacturing, and optimizing the production management process and improving operational efficiency are one of the important management lines of Lingyi Intelligent Manufacturing. According to internal statistics, in 2023, the company will achieve direct labor costs of about 3.277 billion yuan through a series of lean production improvement and upgrading work, a year-on-year decrease of about 6.76%.
In the process of practice, Lingyi Intelligent Manufacturing IE Academy investigated the workflow of the whole group, used ECRS improvement tools, redesigned the production process, eliminated bottlenecks and non-value-added activities, simplified operation steps, and improved production efficiency. In 2023, the company carried out common projects such as paperless projects, data report kanban projects, and process streamlining and digital intelligence, completing a total of 169 projects and streamlining more than 60,000 man-hours.
The company has adhered to independent research and development and independent innovation for many years, and the company's specific research and development direction is mainly divided into product development, mold and process and production automation. The company has developed and optimized a series of core process technologies around market demand, such as intelligent AOI detection system and automatic product detection feedback and adjustment system, high-speed precision stamping technology, stamping one flow, workshop unmanned technology, die-cutting first-line flow scheme, stamping simulation technology, etc.
In addition, the company has established a R&D system in the world, and transformed the world's advanced technology into the driving force of China's intelligent manufacturing, applied the research and development of artificial intelligence and robots to the overall industrial solution of automated production, combined with independent research and development of a variety of multi-functional numerical control and automation equipment, built an intelligent production workshop with leading technology and equipment, and successfully built an efficient modern smart factory. By investing in self-developed automation equipment, the company has improved the degree of automation in manufacturing, handling, testing, packaging and other links, effectively saving production costs, and improving the flexibility, accuracy and scalability of the business.
Under the wave of AI, intelligent terminals are ushering in a new golden age, full of unlimited development opportunities. With strong R&D capabilities to empower product innovation and technology development, Lingyi Intelligent Manufacturing has realized the successful transformation from OEM to JDM and ODM, and with the precipitation and leading strength of precision "functional parts" for many years, we will work with customers to promote the development of intelligent terminals in the direction of higher performance, more functions and better experience in the new era of AI, and jointly build a "big future" for intelligent terminals.
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