Espressif Systems(SH:688018) HTSC·2024-10-24 08:08Investment Rating - The report maintains an "Accumulate" rating with a target price of RMB 158.7 [4][6][7] Core Views - The company achieved revenue of RMB 540 million in Q3 2024, representing a year-over-year increase of 49.96% and a quarter-over-quarter increase of 1.27%. The net profit attributable to the parent company was RMB 99 million, up 340.17% year-over-year and 1.79% quarter-over-quarter [1] - The growth in revenue is primarily driven by strong demand in the smart home and consumer electronics markets, with an expected growth rate of 30-35% in these sectors for 2024. Additionally, the penetration rate of IoT in various non-home sectors is continuously increasing [1][2] - The company is experiencing high growth in energy management, tools, and health sectors due to expanding ecological influence, with many potential new customers joining between 2023 and 2024, raising the average growth rate [1] - The company maintains good cost control, and the gross profit margin has improved year-over-year, leading to significant operating leverage effects [1] Summary by Sections Revenue and Profitability - In Q3 2024, the company's revenue was RMB 540 million, with a year-over-year growth of 49.96% and a quarter-over-quarter growth of 1.27%. The net profit attributable to the parent company was RMB 99 million, reflecting a year-over-year increase of 340.17% [1] - The company’s gross profit margin in Q3 2024 was 42.14%, down 1.97 percentage points from the previous quarter, but the long-term gross profit margin target remains at 40% [2] Customer and Market Diversification - The company has reduced its reliance on single customers and markets, with the top five customers accounting for only 23.4% of revenue in the first three quarters of 2024. The proportion of overseas revenue has increased to 27.5% [2] - The company’s product revenue for chips and modules in Q3 2024 was RMB 184 million and RMB 354 million, respectively, with a quarter-over-quarter decline of 13.61% for chips and an increase of 13.45% for modules [2] Future Outlook - The report anticipates that the upcoming domestic and international sales peak in Q4 2024 will drive revenue growth. New product categories are expected to enter a growth phase, and the company is expanding into low-power Bluetooth, SoC, and high-speed WiFi markets [3] - The company’s ecosystem is continuously enriched by open-source SDKs and community support, attracting numerous developers [3] Financial Projections - The report maintains profit forecasts for the parent company at RMB 375 million, RMB 481 million, and RMB 629 million for 2024, 2025, and 2026, respectively [4][5] - The company’s revenue projections for 2024, 2025, and 2026 are RMB 2.125 billion, RMB 2.78 billion, and RMB 3.519 billion, reflecting growth rates of 48.31%, 30.80%, and 26.58% respectively [5][11]