Biwin Storage Technology (SH:688525) Zhi Tong Cai Jing·2025-11-13 08:39Core Viewpoint - The storage industry has shown remarkable performance in the capital market since September, driven by a structural supply-demand imbalance and rising product prices due to increased AI computing power and strategic capacity reductions by major producers [1][2]. Group 1: Market Performance - Since September, stocks in the storage sector, such as Shannon Chip Creation and Bawei Storage, have seen significant price increases, with Bawei Storage's stock rising by 142.45% [1]. - The storage industry is expected to maintain its upward trend in market conditions at least until the second half of 2026 [1]. Group 2: Company Overview - Bawei Storage is the only independent storage solution provider globally with wafer-level packaging capabilities and is the largest independent storage manufacturer with proprietary packaging manufacturing as of 2024 [2]. - The company plans to use funds raised from its upcoming Hong Kong listing to upgrade its self-developed main control chips, enhance storage solution design, and expand its advanced packaging capabilities [2]. Group 3: Revenue Growth - Bawei Storage's revenue has shown rapid growth, with figures of 2.986 billion, 3.591 billion, and 6.695 billion RMB for 2022, 2023, and 2024 respectively, indicating a strong upward trend [7]. - The company’s revenue from smart mobile and AI emerging sectors, PC and enterprise storage, and smart automotive applications accounted for 55.4%, 30.5%, and 12.5% of total revenue in 2024 [8]. Group 4: Profitability and Challenges - Bawei Storage's adjusted net profit fluctuated significantly, with figures of 78.27 million, -500 million, and 473.3 million RMB for 2022, 2023, and 2024 respectively, indicating volatility in profitability [10][11]. - The company's gross margin was 12.8% in 2022, dropped to -2.1% in 2023 due to falling product prices, and rebounded to 17.3% in 2024 [12]. Group 5: Inventory and Strategic Positioning - As of September 30, 2025, Bawei Storage's inventory reached 5.695 billion RMB, reflecting a 61% year-on-year increase, which supports short-term performance but raises concerns about sustainability [14]. - The company emphasizes a diversified supply strategy to ensure stable access to key raw materials, which is crucial for its ongoing business expansion [14]. Group 6: Technological and Market Position - Bawei Storage has established a full-chain technical capability encompassing chip design, solid-state algorithms, and advanced packaging, positioning itself well in high-growth sectors like AI and smart automotive [15]. - The company’s strategic layout indicates potential for sustained growth in the medium to long term, contingent on leveraging current market conditions and its upcoming listing [16].