OmniVision Integrated Circuits Group(SH:603501) HTSC·2024-10-10 10:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 127.00 [3][6]. Core Views - The company is expected to report a net profit attributable to shareholders of RMB 9-11 billion for Q3 2024, reflecting a year-on-year growth of 318-411% [3]. - Revenue for Q3 2024 is projected to be between RMB 66.5-69.0 billion, representing a year-on-year increase of 7-11% [3]. - The improvement in profitability is attributed to the recovery of gross margins driven by product and supply chain optimization [3][4]. - The company is expected to see a gradual slowdown in profit growth in the future as its market positioning becomes more established [6]. Summary by Sections Financial Performance - Q3 2024 revenue is expected to reach RMB 66.5-69.0 billion, surpassing the previous record of RMB 64.5 billion in Q2 2024 [4]. - The net profit margin for Q3 2024 is projected to be between 12.3-15.2%, an improvement from 12-13% in Q2 2024 [4]. - The company anticipates net profits of RMB 32.4 billion, RMB 42.1 billion, and RMB 51.9 billion for the years 2024, 2025, and 2026 respectively [6]. Product and Market Outlook - The automotive CIS product line is expected to grow significantly, with revenue projected to be 2.65 times that of 2021 [5]. - High-margin products, particularly in mobile and automotive sectors, are expected to contribute to revenue growth [4][5]. - The company is also expected to benefit from the increasing penetration of its mobile CIS products in the Android market over the next two years [5]. Valuation Metrics - The company is assigned a PE ratio of 46.43 for 2024, compared to the industry average of 61.26 [6]. - The projected earnings per share (EPS) for 2024 is RMB 2.67, with a significant increase in net profit expected [7][13]. - The company's market capitalization is approximately RMB 140.24 billion [2].