1、 2023 Annual Report Performance Summary
After experiencing market fluctuations for a period of time, as a leading domestic storage chip enterprise, GD Innovation's 2023 Annual Report has revealed many new market information. The report shows that the company achieved a total operating revenue of 5.761 billion yuan in 2023, a year-on-year decrease of 29.14%. The net profit attributable to shareholders (CAS China Accounting Standards) was 161 million yuan, a year-on-year decrease of 92.15%.
The decline in performance is mainly attributed to the weak demand in the terminal market and fierce competition among peers, resulting in a significant decrease in product prices. In the first three quarters of 2023, the unit prices of all product lines of the company showed a downward trend, and by the fourth quarter, the prices of multiple product lines were approaching or reaching the bottom area. As a result, the company's gross profit has significantly declined, with the comprehensive gross profit margin dropping from 47.66% to 34.42%.
From the perspective of product line revenue, storage chips, as the main source of revenue for Zhaoyi Innovation, achieved a revenue of 4.077 billion yuan. Although it decreased by 15.51% year-on-year, the decline did not significantly expand. In contrast, the performance of the microcontroller (MCU) business was even more dismal, with revenue plummeting by 53.46% to 1.317 billion yuan, becoming the main reason for the significant decline in the company's overall performance.
2、 2024 Q1 Report Performance Highlights
After more than two years of difficult times, Zhaoyi Innovation has finally ushered in a turning point in performance. According to the Q1 2024 report, the company achieved a revenue of 1.627 billion yuan in the first quarter of this year, a year-on-year increase of 21.32%; The net profit attributable to the parent company reached 205 million yuan, a year-on-year increase of 36.45%. This achievement not only achieved the long-awaited double growth, but also the net profit attributable to shareholders has exceeded the full year profit of 2023, indicating that the company's profit is returning to a high growth track.
The main reason for the rebound in performance is due to the recovery in consumer market demand and the increase in storage chip shipments. With the clear recovery of demand in downstream application fields, it will gradually drive manufacturers to increase their storage chip sales and product prices in the future. Zhaoyi Innovation has also clearly stated that mainstream storage prices will continue to rise in 2024, and the company's NAND prices will continue to rise.
In addition, Zhaoyi Innovation has also achieved impressive results in multiple product lines. Among them, the annual shipment volume of NOR Flash products reached a record high, reaching 2.533 billion units, achieving a growth of 16.15%. The market expansion effect of self owned brand DRAM products is significant, with a new increase in the total number of transaction customers. The shipment volume of DDR3L, 2Gb, and 4Gb products continues to increase.
The recovery of storage chips is clear, and Zhaoyi Innovation is returning to high growth, with Q1 net profit exceeding the full year of 2023!
After more than two years of decline, Zhaoyi Innovation finally saw a turning point in the first quarter of 2024.
In the first quarter of this year, Zhaoyi Innovation achieved dual growth in revenue and net profit, with net profit exceeding the full year level of 2023, and profits returning to a high growth track. This performance rebound is mainly due to the rebound in consumer market demand and the increase in storage chip shipments.
With the clear recovery of demand in downstream application fields, the sales and prices of storage chips will gradually rebound. Zhaoyi Innovation also predicts that mainstream storage prices will continue to rise in 2024, and the company's NAND prices will rebound.
Industry analysis agencies predict that by the end of 2024, DRAM and NAND Flash prices will rise by about 60%, which will bring greater development opportunities for Zhaoyi Innovation. Looking ahead, Zhaoyi Innovation is expected to achieve steady growth in revenue and net profit through its leading position in the storage chip field.
GD Innovation Q1 2024 Report
MCU plummeted, NOR Flash shipped over 20 billion units
Zhaoyi Innovation's performance suffered a heavy setback in 2023, with the sharp decline in its microcontroller business becoming the main pain point. As one of the important product lines of Zhaoyi Innovation, microcontrollers saw a year-on-year decline of 53.46% in revenue last year, becoming the main culprit for the company's declining performance. Previously, the microcontroller business had been one of the driving forces for the company's growth, but in 2023, due to weak market demand and continuous decline in product prices, the business suffered a heavy blow.
Despite facing difficulties in the microcontroller business, Mega's innovative storage chip business remains robust. Last year, the company's storage chip revenue reached 4.077 billion yuan, although there was a year-on-year decline, the decline did not significantly expand. Among them, NOR Flash products performed particularly well, with a record high annual shipment volume of 2.533 billion units, a year-on-year increase of 16.15%. Zhaoyi Innovation NOR Flash shipped over 21.2 billion units!
In terms of its own brand DRAM products, Zhaoyi Innovation has also made significant progress. Last September, the company successfully achieved mass production of DDR3 products and already has two product lines, DDR3 and DDR4. Through active market expansion strategies, the total number of DRAM products sold by Zhaoyi Innovation has steadily increased, and the shipment volume of DDR3L 2Gb and 4Gb products in application fields such as Netcom and TV continues to increase.
The difficulties faced by GD Innovation in the microcontroller business have not affected its sustained pace of innovation. The company's 32-bit general-purpose MCU products based on the ARM Cortex-M series and RISC-V core have successfully mass-produced 46 product series and over 600 MCU products, covering a wide range of applications in industrial, consumer electronics, automotive electronics and other fields. Despite the current sluggish market demand, Zhaoyi Innovation still insists on research and development innovation and actively plans for the future.
Looking ahead to the future, as the storage market gradually recovers and the microcontroller business gradually recovers, Zhaoyi Innovation is expected to return to its growth trajectory. The company will continue to adhere to the concept of innovation driven, strengthen research and development investment and market expansion, consolidate and enhance market share and competitiveness in various product lines.