Core Viewpoint - The report from Everbright Securities indicates that Shanghai Fudan (01385) is experiencing a recovery in high-reliability sectors and storage demand, while actively expanding into emerging fields such as automotive and industrial applications. However, due to intense market competition and the impact of asset impairment losses in 2025, the profit forecast for 2025-2027 has been adjusted downward for 2025 and 2026, while showing an increase for 2027 [1] Group 1: Financial Performance - In the first three quarters, the company achieved revenue of 3.024 billion RMB, representing a year-on-year growth of 12.7% [2] - In Q3 2025, the company reported revenue of 1.186 billion RMB, with a significant year-on-year increase of 33.28% [2] - The revenue growth in Q3 was primarily driven by sales of non-volatile storage chips, smart meter chips, and FPGA and other chip businesses, with respective year-on-year growth rates of 44%, 42%, and 34% [2] Group 2: Profitability Metrics - The overall gross profit margin for products in the first three quarters was 58.47%, an increase of 3.42 percentage points year-on-year [2] - In Q3 2025, the gross profit margin for products reached 61.06%, reflecting an increase of 8.91 percentage points, attributed to revenue growth and product structure optimization [2] - The net profit attributable to shareholders for the first three quarters was 330 million RMB, a decline of 22.69%, influenced by government subsidy inspections, reduced VAT deductions, increased storage impairment provisions, and intangible asset impairment [2] - In Q3 2025, the net profit attributable to shareholders was 137 million RMB, showing a year-on-year growth of 72.69%, with a corresponding net profit margin of 12% [2] Group 3: Future Outlook - The profit forecast for 2025-2027 has been adjusted to 530 million RMB, 976 million RMB, and 1.191 billion RMB, reflecting changes of -26.4%, -1.1%, and +7.2% respectively compared to previous predictions [1] - The expected year-on-year growth rates for net profit in 2025, 2026, and 2027 are -7%, +84%, and +22% respectively [1] - The current closing price is 39.5 HKD, corresponding to a forecasted P/E ratio of 56x for 2025 and 30x for 2026, with a maintained "buy" rating due to accelerated domestic substitution of FPGA chips and recovery in storage demand [1]