Core Viewpoint - The report from Everbright Securities indicates a recovery in demand for high-reliability and storage sectors for Shanghai Fudan (01385), while also highlighting the company's expansion into emerging fields such as automotive and industrial applications. However, due to intense market competition and asset impairment losses, profit forecasts for 2025-2027 have been adjusted downward for 2025 and 2026, while showing an increase for 2027. The current stock price suggests a "buy" rating based on the anticipated recovery in memory business and accelerated domestic substitution of FPGA chips [1][2]. Financial Performance - For the first three quarters, the company achieved revenue of 3.024 billion RMB, representing a year-on-year growth of 12.7%. In Q3 2025, revenue reached 1.186 billion RMB, with a significant year-on-year increase of 33.28%. The growth in Q3 revenue was primarily driven by sales of non-volatile memory chips, smart meter chips, and FPGA and other chip businesses, with respective year-on-year growth rates of 44%, 42%, and 34% [2]. - The overall gross profit margin for the first three quarters was 58.47%, an increase of 3.42 percentage points year-on-year. In Q3 2025, the gross profit margin was 61.06%, up by 8.91 percentage points, attributed to revenue growth and product mix 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 verification, a decrease in VAT deductions, increased provisions for storage price declines, and impairment of intangible assets. In Q3 2025, the net profit attributable to shareholders was 137 million RMB, reflecting a year-on-year increase of 72.69%, with a corresponding net profit margin of 12% [2]. Market Outlook - The report emphasizes the ongoing recovery in the storage business and the acceleration of domestic substitution for FPGA chips, which are expected to positively impact the company's future performance. The adjusted profit forecasts reflect a cautious outlook due to competitive pressures and asset impairment issues, but the long-term growth potential remains strong [1].