Smarter Microelectronics (Guangzhou) (SH:688512) Guotai Junan Securities·2024-11-19 05:50Investment Rating - The report maintains a "Buy" rating for the company, with a revised target price of 18.24 CNY [3][4]. Core Views - The company is expected to benefit from major clients, with its RF module products for 4G and 5G anticipated to scale up, leading to a reversal of its current difficulties [2][3]. - The report highlights that the RF sector's price competition is gradually bottoming out, which should improve the company's gross margins as major manufacturers begin to stabilize their cash flows [3]. Financial Summary - The company is projected to generate revenues of 558 million CNY in 2024, down from previous estimates, with 2025 revenues expected to reach 1.295 billion CNY and 2026 revenues at 2.292 billion CNY [3][10]. - The earnings per share (EPS) estimates have been adjusted to -0.85 CNY for 2024, 0.01 CNY for 2025, and 0.48 CNY for 2026 [3][10]. - The company reported a revenue of 130.3 million CNY in Q3 2024, a year-on-year decrease of 13% [3]. Product Development - The company is actively advancing its 5G and 4G RF module research and development, with its L-PAMiD product already in small-scale production, which is expected to accelerate adoption by brand clients [3]. - New product developments include the small-sized high-integration n77/n79 dual-band L-PAMiF products and conventional low-pressure PA chips for 5G, as well as upgraded 4G PA products [3]. Market Position - The company is positioned as a leading supplier of RF modules, benefiting from demand from smartphone and IoT brand clients [3]. - The overall product structure is being optimized, with expectations for significant volume increases in high-end products from major brands such as Samsung, Vivo, Xiaomi, and OPPO [3].