Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong
Espressif Technology Co., Ltd. (688018. SH) business performance reached a new high.
In the first three quarters of 2024, the company expects to achieve operating income of about 1.46 billion yuan, a year-on-year increase of about 42%; It is estimated that the net profit after deducting non-recurring gains and losses (hereinafter referred to as "non-net profit") will be about 231 million yuan, a year-on-year increase of about 238%.
A reporter from the Yangtze River Business Daily found that Espressif Technology, both in terms of operating income and non-net profit, will hit a record high in the same period, and both are higher than the level of any previous year.
In response to the rapid growth of business performance in the first three quarters of 2024, Espressif Systems said that since 2023, the company has added a number of potential customers, and the projects of these downstream customers have gradually entered the stage of large-scale production, contributing to the company's main growth.
According to the disclosure, Espressif Systems has a leading market position in the field of Wi-Fi MCU communication chips for the Internet of Things, and Espressif Systems ranks first in the Wi-Fi MCU market in terms of shipments in the Wi-Fi sub-segment and fifth in the world in the large Wi-Fi market.
Institutions are also optimistic about the development prospects of Espressif Technology. In the second quarter of 2024, the fund increased its net holdings of 13,410,400 shares of Espressif Technology, and 64 fund companies entered the market.
Net profit is expected to increase for three consecutive quarters
Espressif Systems has ushered in a period of rapid growth in business performance.
According to the voluntary disclosure announcement of the performance forecast released by Espressif Technology, in the first three quarters of 2024, the company expects to achieve operating income of about 1.460 billion yuan, an increase of about 433 million yuan compared with the same period of the previous year, an increase of about 42% year-on-year. It is estimated that the net profit attributable to the owners of the parent company (hereinafter referred to as the "net profit") will be about 251 million yuan, an increase of about 164 million yuan compared with the same period last year, a year-on-year increase of about 188%; It is estimated that the non-net profit will be about 231 million yuan, an increase of about 162 million yuan compared with the same period last year, a year-on-year increase of about 238%.
In the first three quarters of 2023, Espressif's operating income, net profit, and non-net profit after deduction were RMB1.027 billion, RMB87.1691 million, and RMB68.3301 million, respectively, representing year-on-year increases of 8.18%, 3.96%, and 6.57%.
Compared with the first three quarters of last year, in the first three quarters of 2024, the company's operating income, net profit, and non-net profit have all turned to rapid growth year-on-year.
In the first and second quarters of 2024, Espressif's operating income was RMB387 million and RMB533 million, respectively, up 21.71% and 52.78% year-on-year. net profit was 54 million yuan and 98 million yuan respectively, a year-on-year increase of 73.43% and 191.87%; The net profit after deduction was 48 million yuan and 98 million yuan respectively, a year-on-year increase of 88.56% and 242.78%.
According to the performance forecast and the data of the first and second quarters, in the third quarter of 2024, the company's operating income, net profit, and non-net profit are expected to be 540 million yuan, 99 million yuan, and 85 million yuan respectively, a year-on-year increase of 50%, 330.43%, and 507.14%.
The data shows that the company's operating income, net profit, and non-net profit in the third quarter continued to grow rapidly year-on-year in the first and second quarters.
In this regard, Espressif Systems said that in the context of the increasing penetration rate of digitalization and intelligence in various downstream industries, the continuous strengthening of Espressif's global brand influence, the extensive support of the developer community, and the improvement of the industry competitive environment, the company has added many potential customers since 2023, and the projects of these downstream customers have gradually entered the stage of large-scale production, contributing major growth to the company.
The company says its products have long life cycle characteristics. Since the beginning of this year, the performance of classic products has been stable, and the sub-new category is in a stage of rapid growth, which has promoted the growth of operating income. With the continuous enrichment of the product line, the new series has differentiated characteristics and will further open up new markets.
Provide one-stop service for software and hardware
Espressif Technology, with its rapid growth in business performance, has strong market competitiveness.
Espressif Systems has a leading market position in the field of Wi-Fi MCU communication chips for the Internet of Things. According to the Wireless Connectivity Market Analysis released by TSR, a semiconductor industry research organization, Espressif Systems ranks first in the Wi-Fi MCU market in terms of shipments and fifth in the world in the large Wi-Fi market, after MediaTek, Qualcomm, Realtek, and Broadcom.
According to Espressif, the company's goals will no longer be limited to IoT devices. In addition to mobile devices, other areas will become the new target market for the company's Wi-Fi product line, expanding the market capacity to 2.5 times the existing one. In addition, the company will continue to focus on the product strategy of "processing + connectivity", develop multi-faceted AIoT SoCs, and actively explore new market areas such as high-speed data transmission, Bluetooth, Thread, and high-performance SoCs.
Espressif's strategic goal is to become an IoT platform company that combines chip hardware, software solutions, and cloud technologies to provide one-stop AIoT products and services to all enterprises and developers around the world.
In September 2023, Espressif's cumulative global shipments of IoT chips exceeded 1 billion.
At present, the company has completed the transformation from only selling hardware to providing one-stop service for hardware, software and cloud products.
In terms of technology, Espressif's core technologies are all independently developed. The company said that it has more technical accumulation and continuous innovation capabilities in the field of embedded MCU wireless communication chips, and has independent research and development core technologies in chip design, artificial intelligence, radio frequency, equipment control, processor, data transmission, etc.
As of the end of June 2024, the company has obtained a total of 195 authorized patents and software copyrights. Among them, there are 95 invention patents, 31 utility model patents, 11 design patents and 32 United States patents.
Espressif's R&D investment continues to increase. From 2021 to 2023, the company's R&D investment will be 272 million yuan, 337 million yuan, and 404 million yuan respectively, with growth for three consecutive years. In the first half of 2024, the company's R&D investment will be 217 million yuan, a year-on-year increase of 22.73%.
Based on the technological advantages formed by R&D, Espressif's gross profit margin is relatively stable. The company expects gross margin to remain above 40% in the first three quarters of 2024.
Institutions are optimistic about the development prospects of Espressif Technology. In the second quarter of 2024, the fund increased its net holdings of 13,410,400 shares of Espressif Technology, including 64 new fund companies.
In the secondary market, on April 12, 2024, Espressif Technology's closing price was 65.73 yuan/share, and on October 14, 2024, the closing price was 137.15 yuan/share, and the stock price rose 108.66% in six months.
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