Willsemi(SH:603501)2024-10-29 03:31Investment Rating - The report maintains a "Buy" rating for the company with a target price of CNY 130.8, indicating a potential upside of 17% from the current price of CNY 111.8 [1][3][10]. Core Insights - The company's Q3 performance aligns with previous earnings forecasts, showing growth in both mobile and automotive sectors. Revenue, gross margin, and net profit all experienced year-on-year increases, with net profit growth significantly outpacing revenue growth, indicating a positive fundamental trend [1][6]. - The mobile CIS market share continues to rise, with expectations for sustained growth in 2024 supported by capacity expansion. The mobile CIS gross margin is projected to remain above 30% [1][6]. - The automotive CIS business benefits from the rapid increase in penetration of new energy vehicles and intelligent driving, with revenue growth expected to remain strong and gross margins stable at over 40% [1][6]. - Over the next 2-3 years, new product lines such as display drivers and automotive-grade analog products are anticipated to break even or become profitable, enhancing the company's overall profitability [1][6]. Financial Summary - For Q3 2024, the company reported revenue of CNY 6.82 billion, a 10% year-on-year increase and a 6% quarter-on-quarter increase, marking a historical quarterly high. The gross margin for Q3 was 30.4%, up 8.7 percentage points year-on-year [6][7]. - The operating profit surged by 131% year-on-year, while net profit reached CNY 1.01 billion, reflecting a 368% year-on-year increase [6][7]. - The report includes adjusted earnings forecasts for 2024 and 2025, with projected revenues of CNY 25.94 billion and CNY 29.47 billion respectively, reflecting growth rates of 23% and 14% [2][8]. Valuation - The report employs a DCF valuation method, assuming a risk-free rate of 2.2% and a growth rate of 30% for the company from 2029 to 2032, with a WACC of 15.1%. The calculated target price is CNY 130.8 [1][8][9].