Espressif Systems(688018) 民生证券·2024-10-27 11:00Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 131.81 CNY [4]. Core Insights - The company achieved significant growth in its financial performance, with a revenue of 1.46 billion CNY for the first three quarters of 2024, representing a year-on-year increase of 42.17%. The net profit attributable to shareholders reached 251 million CNY, up 188.08% year-on-year [2]. - The company's AIoT strategy is driving growth, with a focus on embedded wireless communication chips and multiple key project developments [2]. - The company has established a strong ecosystem through its 2D2B business model, attracting a global developer community that enhances its market competitiveness [2]. Financial Performance Summary - For Q3 2024, the company reported a revenue of 540 million CNY, a year-on-year increase of 49.96%, and a net profit of 99 million CNY, up 340.17% year-on-year [2]. - The projected net profits for 2024, 2025, and 2026 are 346 million CNY, 462 million CNY, and 581 million CNY, respectively, with growth rates of 154.1%, 33.3%, and 25.9% [2][3]. - The company's gross margin for Q3 2024 was 42.14%, maintaining a high level despite a slight decrease [2]. Project Development - The company is focusing on several key projects, including the development of Wi-Fi 6 FEM, high-performance low-resource firmware (ESP-IDF 5X), cloud platform upgrades, and RISC-V multi-core application processors [2]. Market Positioning - The company has built high barriers to entry through its ecosystem, which is expected to support sustained high growth in performance as the industry expands [2].