Yuanjie Semiconductor Technology (688498) Tianfeng Securities·2024-09-02 07:10Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at 87.37 CNY per share [6]. Core Views - The company reported significant revenue growth of 96% year-on-year, achieving 120 million CNY in revenue for the first half of 2024, although net profit decreased by 45% to 10.75 million CNY due to changes in product structure and increased R&D investments [1][4]. - The recovery in the telecom market, particularly in traditional 2.5G and 10G DFB orders, contributed to revenue growth, while the decline in net profit was attributed to reduced government subsidies and increased R&D spending [1][2]. - The company is focusing on R&D, with a 67% increase in R&D expenditure to 22.05 million CNY, representing 18% of total revenue, and an increase in R&D personnel from 77 to 103 [3][4]. Revenue and Profit Analysis - Revenue from the telecom market reached 110 million CNY, up 95% year-on-year, while data center and other revenues surged by 409% to 9.22 million CNY [2]. - The overall gross margin decreased by 5.6 percentage points to 33.4%, with telecom market gross margin at 30%, down 8.9 percentage points year-on-year [2]. R&D and Product Development - The company is investing heavily in silicon photonics and high-speed EML products, with ongoing development in 50G PON and 100G EML products [3]. - The company has achieved mass production capability for 50mw/70mw CW light sources and is optimizing yield [3]. Employee Incentives - A restricted stock incentive plan has been proposed, granting 571,700 shares at a price of 66.06 CNY per share to 176 employees, aimed at enhancing employee motivation and operational efficiency [4]. Financial Forecast - The net profit forecast for 2024-2026 has been revised downwards to 50.42 million CNY, 148.99 million CNY, and 234.25 million CNY respectively, due to increased R&D investments and product structure changes [4][5].