Biwin Storage Technology (SH:688525) Zhi Tong Cai Jing·2025-11-13 08:43Core 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 demand from AI applications and strategic production cuts by major manufacturers [1][2]. Group 1: Market Performance - As of November 13, 2023, stocks in the storage sector, such as Shannon Chip Creation, Demingli, Jiangbolong, and Baiwei Storage, have seen significant price increases of 423%, 258.94%, 288%, and 142.45% respectively since September [1]. - The storage industry is expected to maintain its upward trend in market conditions at least until the second half of 2026, according to CITIC Securities [1]. Group 2: Company Overview - Baiwei Storage is the only independent storage solution provider globally with wafer-level packaging capabilities and is the largest independent storage manufacturer with proprietary packaging 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 improve advanced packaging capabilities, while also pursuing international expansion and strategic partnerships [2]. Group 3: Revenue Growth - Baiwei Storage's revenue has shown rapid growth, with figures of 2.986 billion, 3.591 billion, and 6.695 billion RMB for the years 2022, 2023, and 2024 respectively, and a projected revenue of 3.912 billion RMB for the first half of 2025 [7][8]. - The company’s revenue growth is attributed to recovering downstream demand and the expansion of new customers, with the revenue distribution for 2024 being 55.4% from smart mobile and AI emerging applications, 30.5% from PC and enterprise storage, and 12.5% from smart automotive and other applications [8]. Group 4: Profitability and Challenges - Baiwei 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 a transition from profit to loss in the first half of 2025 [10][11]. - The volatility in profitability is primarily due to the cyclical nature of the storage industry, where inventory management plays a crucial role in financial performance [12]. Group 5: Strategic Positioning - Baiwei Storage has adopted a dual domestic and international growth strategy, with revenue contributions from mainland China and other regions being 50.3% and 49.7% respectively in 2024 [9]. - The company has established a long-term supply agreement with major wafer manufacturers to ensure stable supply of key raw materials, which is essential for its ongoing business expansion [14]. Group 6: Future Outlook - The company is positioned to leverage its unique capabilities in wafer-level packaging and its strategic focus on high-growth sectors such as AI and smart automotive applications to achieve sustained growth [15][16]. - The ability to capitalize on the current industry upcycle and the upcoming Hong Kong listing will be critical for Baiwei Storage to realize its long-term financial potential [16].