SG Micro Corp(SZ:300661) HTSC·2024-08-31 10:08Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 98.60 [2][5]. Core Views - The company reported a significant increase in revenue and net profit for the first half of 2024, with revenue reaching RMB 1.576 billion, a year-on-year increase of 37.27%, and net profit of RMB 179 million, up 99.31% year-on-year [2][3]. - The gross margin for the first half of 2024 was 52.33%, showing a slight increase of 0.8 percentage points year-on-year, indicating stable profitability [2][3]. - The company is benefiting from a recovery in demand in certain sectors such as industrial and automotive, and is positioned as a leading domestic analog device manufacturer [2][4]. Summary by Sections Financial Performance - In Q2 2024, the company achieved a record revenue of RMB 847 million, representing a year-on-year increase of 33.42% and a quarter-on-quarter increase of 16.23% [2][3]. - The net profit for Q2 2024 was RMB 124 million, reflecting a year-on-year growth of 109.10% and a quarter-on-quarter growth of 128.50% [2][3]. - The company’s R&D expenses accounted for 26.5% of its revenue, with a total expenditure of RMB 420 million in the first half of 2024 [3]. Product and Market Outlook - The company has over 5,200 products available for sale across 32 categories, with a continuous increase in customer penetration [3]. - The revenue from signal chain products was RMB 540 million, accounting for 34% of total revenue, while power management products generated RMB 1.04 billion, making up 66% of total revenue [3]. - The company is expanding its product offerings, including new products for electric vehicles, industrial control, 5G communications, and smart home applications [4]. Future Projections - Revenue forecasts for 2024, 2025, and 2026 are projected at RMB 3.248 billion, RMB 4.016 billion, and RMB 4.995 billion, respectively, with corresponding net profits of RMB 459 million, RMB 643 million, and RMB 906 million [5][6]. - The company is expected to maintain a net profit margin recovery, with a projected PE ratio of 72.5 times for 2025, compared to a historical median of 86.5 times since its listing [5].