韦尔股份：Solid 1H24 results with continued recovery in CIS business

Investment Rating - The report maintains a BUY rating for Willsemi with a target price adjusted to RMB115.39, based on a 40.7x 2024E P/E ratio [2][3]. Core Insights - Willsemi reported solid 1H24 results, with revenue increasing by 36.5% YoY to RMB12 billion and net profit growing 790% YoY to RMB1.37 billion [2]. - The company achieved record quarterly revenue of RMB6.4 billion in 2Q24, reflecting a 42.5% YoY increase and a 14.2% QoQ increase [2]. - The growth in net profit for 2Q24 was RMB809 million, up 45.1% QoQ, indicating a strong recovery from a net loss in 2Q23 [2]. - Gross profit margin (GPM) improved to 30.2% in 2Q24, up from 27.9% in 1Q24 and 17.3% in 2Q23, suggesting a favorable product mix [2]. - Net profit margin (NPM) expanded to 12.6% in 2Q24, compared to 9.9% in 1Q24 and a negative margin in 2Q23, attributed to a better cost structure [2]. Revenue and Profit Forecasts - Revenue is projected to grow from RMB21.021 billion in FY23 to RMB26.119 billion in FY24, representing a 24.3% YoY growth [3][9]. - Net profit is expected to increase significantly from RMB555.6 million in FY23 to RMB3.3738 billion in FY24, reflecting a 507.2% YoY growth [3][9]. - The company anticipates continued growth in CIS sales, projecting a 15% HoH increase in 2H24, leading to a 29% YoY growth in 2024 [2]. Segment Performance - CIS sales showed strong growth, with mobile, auto, IoT, and medical segments growing 78.5%, 53.0%, 77.8%, and 41.6% YoY, respectively [2]. - The touch/display business remains weak, with a 28.6% YoY revenue decline due to inventory digestion and ASP pressure, while the analog segment grew by 24.7% YoY [2]. - The report expects the touch/display segment to recover in 2025, driven by new product introductions [2]. Financial Metrics - The report revises net profit forecasts for 2024 and 2025 by -1% and +3%, respectively, due to higher R&D costs as the company enhances its competitiveness [2]. - The projected P/E ratio for FY24 is 32.5x, which is significantly lower than the previous year's 196.3x, indicating improved valuation [3][9].