贝克微：Key domestic analog patterned wafer player well positioned to have multiple years of growth ahead

Investment Rating - The report initiates coverage on BaTeLab with a BUY rating and a target price (TP) of HK$49.8, based on a 19x 2024E P/E ratio [7][21][64]. Core Insights - BaTeLab is a leading provider of analog IC patterned wafers in China, focusing on the industrial-grade market, which has significant growth potential and high margins [7][20][21]. - The company has developed a unique full-stack design platform that integrates EDA, IP, and design, which enhances efficiency and reduces costs [7][21][62]. - BaTeLab's revenue is projected to grow at a CAGR of 38.0% from 2023 to 2026, with expected revenue reaching RMB1,220 million by 2026 [7][64]. Financial Analysis - Revenue growth from RMB353 million in 2020 to RMB464 million in 2023, with a CAGR of 74% [64]. - Net profit margin (NPM) is estimated to be 22.5% in 2024 and 23.5% in 2025, indicating stable profitability [21][64]. - Gross profit margin (GPM) is expected to remain around 54% from 2024 to 2026 [21][64]. Market Position - BaTeLab was the largest provider of analog IC patterned wafers in China by revenue in 2022, holding a 1.7% market share [7][20]. - The total addressable market (TAM) for industrial-grade analog ICs in China is projected to grow at a CAGR of 9.5%, reaching RMB242 billion by 2027 [20][21]. - The industrial-grade analog IC market is characterized by high fragmentation, with the top five players holding only 5.0% of the market share [20][52]. Business Strategy - BaTeLab's business model focuses on the industrial-grade market, which has less competition compared to consumer-grade markets, allowing for better margin maintenance [20][21]. - The company leverages partnerships with distributors, which accounted for 82.3% of total revenue in 1H23, to enhance growth while keeping operating costs low [20][21]. - The full-stack design platform allows BaTeLab to mitigate geopolitical risks and achieve cost advantages, enhancing its competitive position [21][62].