Investment Rating - The report assigns a "Hold" rating to the company with a target price of HKD 16.00, indicating a potential upside of 4.9% from the current price of HKD 15.28 [2][4]. Core Views - The company is facing intense competition in the existing market, leading to pressure on various business segments and a slight decline in gross margins. The overall gross margin is expected to decrease by 5% this year [2][4]. - The company's revenue for Q3 2024 was reported at RMB 889 million, a year-on-year decline of 5.5%. The revenue breakdown includes safety and identification chips, smart meter chips, and FPGA products, with notable declines in gross margins for FPGA and other chips [2][4]. - The smart meter business saw a year-on-year growth of 28.9%, driven by increased bidding demand, with revenue reaching RMB 320 million [2][4]. - The company is actively expanding into automotive electronics and smart home sectors, with ongoing development in high-reliability embedded flash memory processes [2][4]. Financial Summary - The company reported total revenue of RMB 3,536 million for 2023, with a slight decrease from 2022. The net profit attributable to shareholders was RMB 719 million, reflecting a significant decline of 33.38% year-on-year [4]. - The earnings per share (EPS) for 2023 was RMB 0.88, down from RMB 1.32 in 2022. The projected EPS for 2024 is RMB 0.63, indicating a continued downward trend [4]. - The company’s EBITDA for 2023 was RMB 994 million, with a margin of 28.1%, down from 36.7% in 2022 [4]. - The financial outlook for the next three years anticipates a compound annual growth rate (CAGR) of 5.1% for revenue and 9.1% for net profit [2][4].
上海复旦：存量市场竞争激烈，FPGA产品毛利率阶段性承压