Guizhou Zhenhua Fengguang Semiconductor (688439) 国元证券·2024-09-03 00:13Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Views - The company's revenue for the first half of 2024 was CNY 611 million, a decrease of 5.69% year-on-year, and the net profit attributable to shareholders was CNY 231 million, down 9.84% year-on-year. The decline in revenue and profit is attributed to changes in tax incentives and product price reductions [1] - The company is actively promoting technological innovation and has established a new R&D center in Shanghai to enhance its core competitiveness [2][4] - The company has launched over 60 new products, with 49 already in trial and supply, focusing on high-reliability requirements across various fields [3] Financial Performance - The company's gross margin for the first half of 2024 was 67.45%, down 4.28 percentage points, and the net profit margin was 37.62%, down 6.25 percentage points, primarily due to changes in tax policies and increased credit impairment provisions [1] - The net cash flow from operating activities was -CNY 46 million, a decrease of 280% year-on-year, mainly due to a significant reduction in cash received from sales and a substantial increase in taxes paid [2] - The company invested CNY 71.29 million in R&D, accounting for 11.68% of its revenue, and has made significant progress in developing key technologies [4] Future Outlook - The company is expected to benefit from increased production of equipment and domestic substitution trends, with projected net profits of CNY 604 million, CNY 676 million, and CNY 842 million for 2024, 2025, and 2026, respectively [7] - The projected earnings per share (EPS) for the same period are CNY 3.02, CNY 3.38, and CNY 4.21, with corresponding price-to-earnings (P/E) ratios of 15.56, 13.90, and 11.16 [7]