PRIMARIUS(SH:688206) Guotou Securities·2024-09-03 10:09Investment Rating - The investment rating for the company is "Buy - A" with a 6-month target price of 19.40 CNY, compared to the current stock price of 13.29 CNY [4]. Core Insights - The company has experienced a significant growth in design EDA, with a year-on-year increase of 90.5%, driven by strong domestic demand for localization [2][3]. - Despite a decline in overall revenue to 196 million CNY in the first half of 2024, the EDA software business saw a substantial increase, achieving 136 million CNY in revenue, a 46.6% year-on-year growth [2]. - The company is focusing on high R&D investment, with a R&D expense ratio of 63.59%, which is higher than the industry average of 30%-40% for leading global firms [2]. Revenue and Profitability - In the first half of 2024, the company reported a net profit of -41 million CNY, with a non-recurring net profit of -19 million CNY [1]. - The domestic revenue reached 133 million CNY, marking a 43.99% year-on-year increase, which now constitutes 67.86% of total revenue [3]. - The company anticipates continued growth in revenue, projecting 421 million CNY, 539 million CNY, and 690 million CNY for 2024, 2025, and 2026 respectively [8]. Market Position and Strategy - The company is one of the few domestic EDA firms with global competitiveness, benefiting from the growth of the domestic semiconductor industry and opportunities for self-sufficiency [8]. - The company has expanded its product offerings through both internal R&D and acquisitions, including the purchase of Fuzhou Chip Intelligence and Belgian EDA company Magwel, enhancing its market reach [3]. - The company’s design EDA tools are expected to support clients in HBM process development, positioning it to benefit from strong downstream demand [3].