Dioo Microcircuits (SH:688381) Southwest Securities·2024-08-27 04:03Investment Rating - The report assigns a "Buy" rating for the company with a target price of 19.20 CNY over the next six months [1]. Core Views - The company has shown impressive revenue growth, with a 47.3% year-on-year increase in revenue for the first half of 2024, reaching 270 million CNY, although net profit decreased by 7.6% to 30 million CNY [1][12]. - The company is focusing on expanding its product matrix and enhancing its market share, particularly in the automotive sector, with significant investments in research and development [1][8]. - The report anticipates continued revenue growth driven by new product introductions and a recovery in consumer electronics demand, projecting revenues of 600 million CNY, 700 million CNY, and 900 million CNY for 2024, 2025, and 2026, respectively [17]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 270 million CNY, a 47.3% increase year-on-year, while net profit was 30 million CNY, down 7.6% [1][12]. - The revenue breakdown shows that signal chain products generated 140 million CNY (52.8% of total revenue) with a 59.1% increase, while power management products contributed 130 million CNY (47.2% of total revenue) with a 35.5% increase [10][12]. - The gross margin for H1 2024 was 45.8%, down 3.5 percentage points year-on-year, and the net margin was 10.1%, down 6.0 percentage points [1][12]. Product Development and Market Position - The company has launched several new products in both signal chain and power management categories, including automotive-grade components, which are expected to enhance its competitive edge in the automotive electronics market [1][7]. - The establishment of the automotive chip research institute is aimed at strengthening the company's capabilities in automotive electronics [1][8]. - The company has maintained stable partnerships with major clients such as OPPO, Xiaomi, and BYD, which is expected to drive future revenue growth [1][8]. Future Outlook - The report forecasts significant revenue growth for the company, with expected revenues of 600 million CNY in 2024, 700 million CNY in 2025, and 900 million CNY in 2026, alongside net profits of 70 million CNY, 120 million CNY, and 170 million CNY for the respective years [17]. - The anticipated recovery in consumer electronics demand and the growth of automotive products are key drivers for this expected growth [17].