SG Micro Corp(300661) 国元证券·2024-09-05 00:00Investment Rating - Maintain "Overweight" rating with a target price of 81 CNY per share [2] Core Views - Revenue for H1 2024 reached 1.576 billion CNY, a YoY increase of 37.27%, with net profit attributable to shareholders of 179 million CNY, a YoY increase of 99.31% [2] - Gross margin and net margin for H1 2024 were 52.33% and 10.97%, respectively [2] - Q2 2024 revenue was 847 million CNY, a YoY increase of 33.42%, with net profit attributable to shareholders of 124 million CNY, a YoY increase of 109.10% [2] - The company maintained stable gross margins through product structure optimization, new product development, and agent management despite competitive pressure from Texas Instruments [2] - Global analog chip demand in consumer electronics showed signs of recovery in Q2 2024, with Texas Instruments and ADI reporting sequential growth in consumer electronics business [2] - Industrial sector inventory is expected to bottom out in H2 2024, providing growth elasticity for the company [2] - The company has a rich portfolio of over 5,200 product codes in signal chain and power management chips, making it the domestic supplier with the largest product code reserve [2] Industry Analysis - Consumer electronics demand recovery and inventory reduction in Q2 2024 showed positive signals, with Texas Instruments and ADI reporting sequential growth in consumer electronics business [2] - Industrial sector inventory is expected to bottom out in H2 2024, while automotive demand remains weak with ongoing inventory digestion [2] - The company's revenue distribution across consumer, industrial, communication, and automotive sectors is 53%, 32%, 10%, and 5%, respectively [2] Financial Forecasts - Forecasted net profit attributable to shareholders for 2024 and 2025 is 425 million CNY and 569 million CNY, respectively [4] - Revenue growth rates for 2024 and 2025 are expected to be 25.3% and 23.3%, respectively [5] - EPS for 2024 and 2025 is forecasted to be 0.90 CNY and 1.21 CNY, respectively [5] - P/E ratios for 2024 and 2025 are expected to be 78x and 58x, respectively [5] Valuation - Target price of 81 CNY per share based on 67x 2025E EPS [9] - Upside scenario target price of 94 CNY per share based on 78x 2025E EPS [10] - Downside scenario target price of 60.5 CNY per share based on 50x 2025E EPS [11]