Espressif Systems(SH:688018) Shanxi Securities·2024-08-01 07:00Investment Rating - The report maintains a "Buy-A" rating for the company, indicating an expected price increase of over 15% relative to the benchmark index [2][6]. Core Insights - The company has shown significant growth in revenue and net profit for the first half of 2024, with a revenue increase of 37.96% year-on-year to 920 million yuan and a net profit increase of 134.85% to 152 million yuan [3]. - The second quarter of 2024 saw a revenue of 533 million yuan, reflecting a year-on-year growth of 52.78% and a quarter-on-quarter growth of 37.66%, with net profit reaching 98 million yuan, up 191.87% year-on-year and 81.26% quarter-on-quarter [3]. - The company is expanding its product matrix and customer base, targeting new markets beyond traditional IoT devices, which could increase market capacity by 2.5 times [4]. - The gross profit margin has improved, with Q2 2024 margins at 44.11% for gross margin and 18.54% for net margin, indicating a strong operational performance [5]. Financial Performance - The company forecasts revenues of 2.008 billion yuan, 2.629 billion yuan, and 3.231 billion yuan for 2024, 2025, and 2026 respectively, with corresponding net profits of 327 million yuan, 451 million yuan, and 560 million yuan [6][8]. - The projected P/E ratios for 2024, 2025, and 2026 are 37.4, 27.1, and 21.8 respectively, suggesting a favorable valuation trend [6][9]. - The company’s return on equity (ROE) is expected to rise to 14.9% in 2024 and further to 18.6% by 2026, reflecting improved profitability [9].