Ruixinwei： A performance briefing was held on October 31, with the participation of investors.

Securities Star News, on October 31, 2023, Ruixinwei (603893) announced that the company held a performance briefing on October 31, 2023.

The details are as follows:

Q: Why did the company’s performance decline this quarter? What is the reason?

A: In the third quarter of 2023, the company achieved revenue of 602 million yuan, up 83.26% year-on-year and 15.02% quarter-on-quarter; The net profit was 53 million yuan, up 1318.46% year-on-year and 21.63% quarter-on-quarter. However, due to the negative growth of global electronics demand in the first nine months of this year, which has not been seen in 20 years, and the destocking in the second half of 22 years, it will affect the first few months of this year; As a result, the company’s revenue from January to September this year was 1.455 billion yuan and its net profit was 77 million yuan, a cumulative year-on-year decrease.

Q: how about asking the company to sell RK3588M chips? Is the order with the customer sufficient?

A: In the field of automotive electronics, the company has laid out five directions: intelligent cockpit, instrument panel/central control, vehicle-mounted camera, vehicle-mounted audio and video transmission. In the field of intelligent cockpit, the vehicle-mounted solution based on RK3588M can realize the functions of seven-screen display, direct access of multi-channel cameras to look around and splicing, and cabin audio partition, and has strong computing power. At present, a number of models equipped with RK3588M have been mass-produced, and more follow-up models are under cooperative development. In the dashboard/car central control, driving recorder, MDVR, CMS, car entertainment electronics and other products, the company’s products have landed in many models, and more new projects will be introduced in the future. The company will continue to increase investment in automotive electronics, improve product layout and enhance market share in automotive electronics.

Q: I want to know something about your new energy intelligent cockpit business. How does your existing chip matrix fit into the new energy intelligent cockpit? In addition, your company has also cooperated with many eco-manufacturers of car software. What is the progress of cooperation at present?

A: The company has laid out a variety of products in the automobile front-loading market. Besides the most representative smart cockpit chip RK3588M, there are also dashboard control chip RK3358M, car audio chip RK3308M, car power management chip RK806M, RK809M, etc. Therefore, the chip layout in the new energy smart cockpit is full-range, and the smart cockpit SoC chip is matched with different chips to meet the needs of cars in different scenarios and different functions. There will also be a new platform after RK3588M in the direction of intelligent cockpit.

At present, a number of models equipped with RK3588M have been mass-produced, and more follow-up models are under cooperative development. We are also strengthening cooperation with upstream and downstream eco-partners, further improving product functions and increasing market share in the automotive electronics field.

Q: Does the development of AI big model promote the development of the company’s downstream AIoT? What layout does the company have in this regard?

A: The rapid development of Generative Formula I will generate a huge demand for computing power. At the same time, the computing power will be reasonably distributed among clouds, edges and ends according to the application scenarios, and the miniaturization and specialization of the model will be promoted, and various end-side or edge-side applications suitable for specific scenarios will be gradually developed. Therefore, with the rapid development of artificial intelligence model, IoT products on the end side and edge side will also usher in new opportunities.

The company actively embraces the changes brought about by artificial intelligence. On the one hand, on the existing chip platform, the company continues to research and develop I technology required by various application scenarios from the perspective of algorithms and software to better match the needs of customer products. On the other hand, in chip design, the company continuously upgraded the artificial intelligence NPU IP and related tool chains to better support various large models based on the underlying technology of Transformer, and designed different computing capabilities for different positioning platforms to meet the differentiated needs of customers.

Q: The company’s R&D expenses are rising quarter by quarter this year. What is the planning of the follow-up R&D investment?

A: The company has always focused on long-term high-quality sustainable development, and has maintained R&D investment accounting for more than 20% of revenue for 10 consecutive years. Through continuous R&D investment, the company has developed iterative IoT core technologies, in-depth layout and promotion of more IoT products, and continuously consolidated its leading position in domestic IoT SoC chip suppliers. The company will maintain high-intensity R&D investment to create a leading layout of products and technologies, and the R&D expenses in a single quarter will fluctuate within a certain range according to the progress of the project.

Q: At present, your RK3588 PC-oriented products are relatively rare. As far as I know, Mary G610 is a mobile-oriented GPU, and the GPU can’t be driven under WINDOW11 ARM. Would you please strengthen cooperation with ARM in a planned way to complete the driving under WIN11 ARM as soon as possible? Also want to know whether Vulkan also has an adaptation plan?

A: Thank you for your concern. At present, RK3588 chip has been adapted to Vulkan. In addition, RK3588 products can support Window11 from the hardware level, and whether or not to cooperate with RM to complete the driver under WIN11 depends on the market demand.

Q: According to the news report, your product RK3568 won the 18th SMIC Excellent Market Performance Product Award. What are the main application scenarios of RK3568?

A: RK3568 is the company’s high-performance IoT chip, which has been commercialized in multiple scenarios. Its application fields cover cloud terminals, Internet of Things gateways, industrial control, NS (network attached storage), network video recorders, and vehicle central control. The company has won the honor of "China Core" products for 17 times, always focusing on technological innovation, insisting on making products with "core" and providing competitive chip solutions for the IoT field.

Q: How does the company view the development prospect of the edge computing market?

A: With the rapid development of artificial intelligence and Internet of Things technology and the widespread application of intelligent terminals, edge computing has developed rapidly in recent years. In the future, as generative artificial intelligence drives computing power to grow together in the cloud, edge and end, the demand for edge computing and end-side IoT products will continue to increase. At present, the company is keeping close communication with customers and exploring the application of edge side together.

Ruixinwei (603893) is mainly engaged in the design, development and sales of large-scale integrated circuits and application solutions, providing customers with complete reference solutions such as chips and algorithms.

Ruixinwei’s third quarterly report in 2023 showed that the company’s main income was 1.455 billion yuan, down 7.37% year-on-year; The net profit of returning to the mother was 77.3164 million yuan, a year-on-year decrease of 71.99%; Deducting non-net profit was 66,416,500 yuan, a year-on-year decrease of 61.56%; In the third quarter of 2023, the company’s main revenue in a single quarter was 602 million yuan, up 83.26% year-on-year; The net profit returned to the mother in a single quarter was 52,516,600 yuan, up 1318.46% year-on-year; The non-net profit deducted in a single quarter was 51.4181 million yuan, up 322.1% year-on-year; The debt ratio is 14.54%, the investment income is 2,658,500 yuan, the financial expenses are-14,056,600 yuan, and the gross profit margin is 34.81%.

In the last 90 days, the stock has been rated by 13 institutions, with 12 buy ratings and 1 overweight rating. The average institutional target price in the past 90 days was 77.51.

The following is the detailed profit forecast information:

The data of margin financing and securities lending shows that the net financing inflow of the stock in the past three months is 31.8359 million, and the financing balance has increased; The net inflow of securities lending was 23.4375 million, and the balance of securities lending increased.

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