GigaDevice(603986) 国元证券·2024-07-10 06:02Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 108.5 to 134.8 CNY based on a valuation of 62x to 72x for 2024 [2][10]. Core Views - The company is expected to recover its performance in the first half of 2024, with projected revenue of 3.609 billion CNY (YoY +21.69%) and net profit of 518 million CNY (YoY +54.18%) [2]. - The decline in inventory levels and the upward trend in product prices are anticipated to improve the company's gross margin, leading to significant profit growth in Q2 2024 [2]. - The demand for Nor Flash products is expected to rise due to applications in TWS headphones, AI phones, AI PCs, and servers, benefiting the company as the second-largest Nor Flash manufacturer globally [2]. - The transition of major manufacturers from DDR3 to higher-value DDR5 and HBM is expected to create a supply gap in niche DRAM, which the company aims to capitalize on by shifting from agency sales to self-developed DRAM [2]. - The automotive sector, a key application area for MCUs, is projected to enter a replenishment phase in late 2024 to early 2025, which may revitalize demand for the company's MCU products [2]. Summary by Sections Financial Performance - The company achieved revenue of 3.609 billion CNY in H1 2024, slightly exceeding expectations, with an upward revision of 2024 revenue forecast to 7.969 billion CNY and net profit to 1.165 billion CNY [2][3]. - The gross margin is expected to be approximately 39% for 2024 [2]. Market Outlook - The report highlights a positive outlook for the semiconductor industry, driven by the recovery in demand and pricing power due to inventory adjustments and market dynamics [2]. - The company is positioned to benefit from the anticipated price increases in the Nor Flash market as competitors face margin pressures [2]. Valuation Metrics - The report provides a detailed financial forecast, projecting significant revenue growth rates of 38.3% for 2024 and 24.7% for 2025, alongside a substantial increase in net profit margins [3][7]. - Key financial ratios such as P/E and P/B are projected to improve, indicating a favorable investment proposition [3][7].