GigaDevice(SH:603986) Zheng Quan Zhi Xing·2025-08-26 11:12Core Viewpoint - The report highlights the improved competitive landscape in the DRAM market, which enhances the performance elasticity of Zhaoyi Innovation, leading to an upgraded target price of 158.0 yuan and a "Buy" rating [1]. Financial Performance - In H1 2025, the company achieved revenue of 4.15 billion yuan, a year-on-year increase of 15.0%, and a net profit attributable to shareholders of 575 million yuan, up 11.31% year-on-year [2]. - For Q2 2025, revenue reached 2.24 billion yuan, reflecting a year-on-year growth of 13.09% and a quarter-on-quarter increase of 17.40%. The net profit for the quarter was 341 million yuan, with a year-on-year increase of 9.17% and a quarter-on-quarter rise of 45.27% [2]. Business Segments - The DRAM business profitability is recovering due to an improved supply structure and product optimization, with major manufacturers gradually exiting the niche DRAM market, leading to tighter supply and rising prices since March [2]. - The company's subsidiary, Qingyun Technology, is capitalizing on AI opportunities by providing customized storage solutions that align with the demands of edge AI [2]. Market Trends - The NOR Flash segment is expected to benefit from a recovery in demand across four key areas: consumer electronics, computing, industrial, and automotive electronics, with a forecasted mild price increase due to the dual drivers of recovering demand and tight supply [3]. - The MCU business is also seeing significant growth driven by government subsidies and downstream inventory demand, particularly in consumer electronics and network communication sectors [3]. Profit Forecast - The company forecasts net profits of 1.45 billion yuan and 1.61 billion yuan for 2025 and 2026, respectively, corresponding to price-to-earnings ratios of 72x and 65x [3].