Rockchip(603893) China Post Securities·2024-10-25 09:10Investment Rating - Buy rating maintained for Rockchip Microelectronics (603893) [2] Core Views - Strong recovery in performance with new products expected to drive growth [2] - Downstream demand has fully rebounded, with potential for further improvement in gross margin [3] - New products are rapidly gaining market share, with multiple product lines expected to see increased market penetration [3] Financial Performance - Revenue for the first three quarters of 2024 reached 2.16 billion yuan, a year-on-year increase of 48.47% [2] - Net profit attributable to the parent company for the first three quarters of 2024 was 352 million yuan, a year-on-year increase of 354.90% [2] - Q3 2024 revenue was 911 million yuan, a year-on-year increase of 51.36%, and a quarter-on-quarter increase of 29.12% [2] - Q3 2024 net profit attributable to the parent company was 169 million yuan, a year-on-year increase of 221.68%, and a quarter-on-quarter increase of 46.75% [2] - Gross margin for Q3 2024 was 37.34%, up 1.26 percentage points year-on-year and 0.48 percentage points quarter-on-quarter [3] - Net profit margin for Q3 2024 was 18.54%, up 9.82 percentage points year-on-year and 2.23 percentage points quarter-on-quarter [3] Market and Product Analysis - Downstream demand recovery is evident in automotive electronics, industrial, and consumer markets, driven by AIoT demand [3] - New products such as RK3576, RK2118, and RV1103B are being rapidly adopted by leading customers in target markets [3] - RK3576 has been introduced to leading customers in target scenarios, while RK2118 is undergoing testing with leading automotive companies and collaborating with top audio manufacturers [3] - The company's "Goose Formation Strategy" with RK3588 series as the flagship has enabled it to serve diverse market needs, with further market share growth expected in AIoT product lines [3] Financial Projections - Revenue for 2024-2026 is projected to be 3.219 billion yuan, 4.225 billion yuan, and 5.323 billion yuan, respectively [4] - Net profit attributable to the parent company for 2024-2026 is projected to be 537 million yuan, 796 million yuan, and 1.086 billion yuan, respectively [4] - EPS for 2024-2026 is projected to be 1.28 yuan, 1.90 yuan, and 2.60 yuan, respectively [5] - PE ratios for 2024-2026 are projected to be 70x, 47x, and 35x, respectively [4] Valuation Metrics - Current PE ratio is 281.34 [1] - PB ratio for 2024-2026 is projected to be 10.05x, 8.29x, and 6.69x, respectively [5] - EV/EBITDA for 2024-2026 is projected to be 78.23x, 50.26x, and 35.34x, respectively [5]