WINGTECH(SH:600745) Orient Securities·2024-09-04 02:13Investment Rating - The report maintains a "Buy" rating for the company with a target price of 30.52 CNY [5][7]. Core Insights - In the first half of the year, the company's revenue increased by 15% year-on-year to 33.59 billion CNY, while net profit attributable to shareholders decreased by 89% to 140 million CNY. The net cash flow from operating activities was 2.64 billion CNY [2]. - The semiconductor business showed significant improvement in gross margin in the second quarter, with revenue declining by 8% year-on-year to 7.04 billion CNY and a gross margin of 35.0%. R&D investment was 874 million CNY, and net profit decreased by 22% to 1.08 billion CNY. In Q2, revenue and net profit were 3.62 billion CNY and 560 million CNY, respectively, with a gross margin increase of 7 percentage points to 38.2% [2]. - The automotive semiconductor revenue accounted for nearly 63% of the total in the first half of 2024, a significant increase from 44% in 2021. The company is expanding its power discrete device product portfolio and investing in analog ICs [2]. - The product integration business is expected to improve profitability in Q3, with revenue increasing by 27% year-on-year to 26.12 billion CNY and a gross margin of 2.5%. R&D investment was approximately 1.16 billion CNY, with a net loss of 850 million CNY [2]. Financial Summary - The company's revenue for 2023 is projected at 61.21 billion CNY, with a year-on-year growth of 5%. The net profit attributable to shareholders is expected to be 1.18 billion CNY, a decrease of 19% [4]. - Earnings per share (EPS) for 2024-2026 are forecasted to be 1.09 CNY, 2.01 CNY, and 2.73 CNY, respectively. The average price-to-earnings (PE) ratio for comparable companies in 2024 is estimated at 28 times [3][4]. - The gross margin is expected to be 14.0% in 2024, with a net margin of 2.0% and a return on equity (ROE) of 3.6% [4].