Orient Securities·2024-08-14 00:08Investment Rating - The report maintains a "Buy" rating for the company with a target price of 60.14 CNY [5][7]. Core Insights - The company reported better-than-expected performance for Q2 2024, achieving a revenue of 1.9 billion USD, a 9% increase quarter-over-quarter and a 22% increase year-over-year, primarily driven by increased wafer sales [2]. - The gross margin for Q2 2024 was 13.9%, with operating profit soaring by 3522% to 87 million USD, and net profit attributable to shareholders reaching 165 million USD, a 129% increase [2]. - The company anticipates a revenue growth of 13% to 15% in Q3 2024, with gross margins projected between 18% and 20% [2]. - Capacity utilization has improved, with an increase in monthly production capacity from 815,000 wafers in Q1 2024 to 837,000 in Q2 2024, and overall capacity utilization rising from 80.8% to 85.2% [2]. - Demand from downstream sectors such as smartphones and consumer electronics is on the rise, contributing to revenue growth, with smartphone applications accounting for 32% of wafer revenue in Q2 2024 [2]. Financial Summary - The company’s projected net profits for 2024, 2025, and 2026 are 4.47 billion CNY, 5.49 billion CNY, and 6.90 billion CNY respectively, reflecting adjustments in revenue and margin forecasts [3][7]. - Revenue for 2024 is expected to be 53.84 billion CNY, with a year-over-year growth of 19% [4]. - The gross margin is projected to improve from 18.4% in 2024 to 24.3% by 2026 [4].