bingocashandroid|德明利(001309)：1Q24利润持续高增 产品结构加速优化

The company's 1Q24 deducted non-net profit increased by 522% compared with the same period last year. The company mainly uses storage particles as raw materials for storage module development, and its products include embedded storage, solid state hard disk and removable storage. Affected by the weak market, the operating profit of each storage particle factory fell into a negative range for 23 months. As the upstream manufacturers continued to reduce production and supply contraction, the storage price 4Q23 significantly warmed up, and the 1Q24 price continued to rise. Under this background: the company 4Q23 achieved revenue of 8%.Bingocashandroid0 billion yuan (YoY+124.6%,QoQ+107.3%), deducting non-return net profit 134 million yuan (YoY+470.7%,QoQ+494.1%), gross profit 32.6% (YoY+21.2pct,QoQ+26.7pct); 1Q24 realized revenue of 810 million yuan (YoY+168.5%,QoQ+1.4%), deducting non-return net profit of 193 million yuan (YoY+521.8%,QoQ+44.2%), gross profit margin 37.3% (YoY+31.4pct,QoQ+4.7pct). As storage enters the uplink cycle, demand repair will also lead to a gradual increase in memory sales. The storage module is mainly through the purchase of storage particles, the wafer design is packaged into a memory product, the storage particles account for about 80% of the product cost, and the storage waferBingocashandroidThe price fluctuation has a direct impact on the company's profitability. The downward cycle of the storage industry lasted from 22 years to the third quarter of 23 years, with the storage factory making a collective loss. In this context, the original factory continued to take production reduction measures, superimposed demand recovery, 4Q23 storage prices into the upward channel; according to WSTS forecast, the 24-year global storage market will grow by 45% compared with the same period last year. As a mid-stream manufacturer, the company has benefited from rising prices of NAND Flash and DRAM products, and the company's product structure has been continuously optimized. The company prepares low-cost raw materials at the trough of the industry, and with the help of the industry uplink cycle, the company's product customers accelerate the roll-out. In 23 years, the company's revenue from mobile storage products is 1.035 billion yuan (YoY+46.31%) and solid-state disk products is 686 million yuan (YoY+52.98%). According to Trendforce data, 1Q24 NAND rose by about 23-28%. It is estimated that 2Q24 NAND Flash will continue to rise, the upward trend of the industry is clear, and the company's new products are expected to accelerate growth. In 23 years, R & D investment increased by 61.39% compared with the same period last year, and continued to focus on the development of main control chips and modules. The company has invested 108 million yuan in R & D over the past 23 years, focusing on the research and development of NAND Flash, SSD and eMMC master chips. On this basis, the company plans to increase 1.25 billion yuan, including 450 million yuan for PCIe SSD master chip and module development and 614 million yuan for embedded memory master chip and module development; in the future, the company will develop PCIe SSD memory control chips and modules suitable for various uses and scenarios, and provide integrated products and services to extend from consumer and commercial market to enterprise market. Investment advice: as the price increase in storage is much higher than we expected, and the company's inventory replenishment is higher than the previous forecast, based on the company's operating performance in 23 years and the first quarter of 24 years, the 24-25 net profit forecast is raised. It is estimated that the 24-26 year net profit will be 8.3pm 86pm 740m (the previous value is 298pm RMB491m in 24-25 years), and the corresponding share price PE is respectively times that of 18-18-21. Maintain the "overweight" rating. Risk hint: consumer electronics demand is lower than expected, product customer expansion is not as expected. [disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.

[disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.