NCE(SH:605111) Zhongyuan Securities·2024-08-16 08:42Investment Rating - The report upgrades the investment rating to "Buy" for the company, indicating an expected relative increase of over 15% compared to the CSI 300 index within the next six months [1][11]. Core Views - The company is experiencing strong revenue and profit growth, with a significant recovery in performance noted in Q2 2024. The gross margin has shown continuous improvement, reaching 36.53% in Q2 2024, up 6.85% year-on-year and 1.77% quarter-on-quarter [1][3]. - The automotive and AI server markets are accelerating, leading to rapid growth in various MOSFET products. The company is actively optimizing its product structure and expanding its market presence in emerging applications [1][3]. - The company has reported a robust performance in H1 2024, with revenue of 875 million yuan, a year-on-year increase of 15.16%, and a net profit of 218 million yuan, up 47.45% year-on-year [1]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 875 million yuan, with a net profit of 218 million yuan, and a non-recurring net profit of 214 million yuan, reflecting year-on-year increases of 15.16%, 47.45%, and 55.21% respectively [1]. - The second quarter of 2024 saw a revenue of 502 million yuan, a year-on-year increase of 30.40% and a quarter-on-quarter increase of 35.01% [1]. Product Performance - The SGT-MOSFET product line generated revenue of 360 million yuan in H1 2024, a year-on-year increase of 40.29%, with some products in a supply-demand imbalance [2]. - The Trench-MOSFET products achieved revenue of 255 million yuan, up 19.64% year-on-year, while SJ-MOSFET products generated 102 million yuan, an increase of 8.49% year-on-year [2]. - The IGBT product line reported revenue of 141 million yuan, a decrease of 22.64% year-on-year, but is expected to recover in H2 2024 [2]. Market Outlook - The company is well-positioned to benefit from the recovery in downstream demand, particularly in the automotive and AI server markets, with expectations for continued growth in SGT and Trench-MOSFET products [3]. - Revenue projections for the company are estimated at 1.878 billion yuan for 2024, 2.274 billion yuan for 2025, and 2.732 billion yuan for 2026, with corresponding net profits of 451 million yuan, 549 million yuan, and 668 million yuan respectively [3].