Biwin Storage Technology (SH:688525) Xin Lang Zheng Quan·2025-05-19 09:26Core Viewpoint - Bawei Storage has faced significant financial challenges, with a notable decline in profitability and continuous losses over recent quarters, highlighting the impact of a down cycle in the semiconductor storage market [1][2][3]. Group 1: Financial Performance - In 2024, Bawei Storage reported a total revenue of 34.41 billion yuan, a year-on-year increase of 199.64%, and a net profit of 2.83 billion yuan, marking a significant recovery [5][6]. - However, the company has experienced a decline in profitability, with a net profit of -1.97 billion yuan in Q1 2025, indicating ongoing financial struggles [1][3]. - The company’s net profit for 2023 was -6.24 billion yuan, despite a revenue increase of 20.27% to 35.91 billion yuan, reflecting a severe downturn in profitability [3][4]. Group 2: Market Conditions - The global storage market saw a 37% decline in 2023, the most significant drop in 15 years, severely impacting Bawei Storage's performance [4][6]. - The average price of general PC DRAM products fell by 35.7% from July to November 2024, while NAND prices dropped over 50% in the same period, indicating a challenging pricing environment [6][7]. - Despite a recovery in the storage market in late 2023, the demand for consumer electronics remains weak, with only a slight increase in PC and smartphone shipments [6][7]. Group 3: Strategic Responses - Bawei Storage has increased its R&D expenses by 97.77% in 2023, aiming to enhance its competitive edge, although this has squeezed profit margins [4][5]. - The company is actively expanding its customer base and investing in R&D to prepare for the next market upturn, despite facing significant pricing pressures [4][5][6]. - The outlook for the DRAM and NAND markets remains pessimistic, with expectations of continued price declines in 2025 [7][8].