Amlogic(688099) 山西证券·2024-08-22 08:44Investment Rating - The report maintains a "Buy-A" rating for Amlogic (688099 SH) [1] Core Views - Amlogic is a leading domestic multimedia SoC company with diversified product lines catering to downstream multimedia needs The company has expanded into WiFi and automotive electronics chips forming a platform-based chip ecosystem [2] - The demand for audio and video SoC business is recovering with the company expanding overseas markets and increasing its market share in TV SoC chips [2] - New business segments such as WiFi chips and automotive electronics chips are progressing rapidly with AI accelerating downstream demand expansion [2] - The company is expected to achieve significant revenue and net profit growth from 2024 to 2026 with a CAGR of 32 2% and 65 5% respectively [2] Financial Data and Valuation - The company's revenue is projected to grow from 7 099 billion yuan in 2024 to 10 489 billion yuan in 2026 with net profit increasing from 824 million yuan to 1 421 billion yuan during the same period [4] - The PE ratio is expected to decrease from 27 5x in 2024 to 16 0x in 2026 indicating a favorable valuation [4] Multimedia SoC Leadership - Amlogic has been a leader in multimedia SoC chip development since 1995 with a strong presence in global markets including China the US and Europe [8] - The company's product lines include S series (set-top boxes) T series (smart TVs) and A series (smart home) with applications in various multimedia and IoT fields [10][12][14] - The company has a stable management team with deep technical expertise and strong customer relationships including partnerships with global brands like Google Amazon and TCL [9] Market Expansion and New Business - The set-top box market is recovering with the company's S series chips gaining traction in both domestic and overseas markets [21][25] - The smart TV market is saturated but the company's T series chips are leading in domestic TV brands and expanding overseas [26][33] - The smart home market is growing rapidly with the company's A series chips widely used in various IoT applications [35][37] - The company is also making strides in the automotive electronics market with its chips being adopted by major car manufacturers like BMW and Volvo [44][45] Financial Performance and R&D - The company's revenue has shown steady growth with a significant increase in R&D investment reaching 23 9% of revenue in 2023 [16][17] - The company's gross margin and expense ratios have stabilized with a focus on maintaining high R&D intensity to drive new product development [16][17] Future Outlook - The company is expected to benefit from the recovery in the set-top box market expansion in the smart TV market and growth in the smart home and automotive electronics sectors [46][47] - The company's strategic focus on R&D and new product development is expected to drive future growth and maintain its competitive edge in the SoC industry [46][47]