韦尔股份：Expect sequential improvement ahead

Investment Rating - The report maintains a "BUY" rating for Willsemi, with a target price (TP) of RMB130, indicating a potential upside of 21.9% from the current price of RMB106.65 [1][3]. Core Insights - Willsemi is expected to experience significant revenue growth of 20.9% to 22.8% year-over-year (YoY) for FY24, driven by increased penetration of CIS products in high-end smartphones and autonomous driving technologies [1]. - The net profit for FY24 is projected to be between RMB3.2 billion and RMB3.4 billion, representing a remarkable YoY increase of 468% to 504% [1]. - The company is anticipated to benefit from domestic consumer subsidy plans and the rapid expansion of key markets such as electric vehicles (EVs), edge AI, and robotics [1]. Financial Performance Summary - Revenue is expected to grow from RMB21.021 billion in FY23 to RMB26.295 billion in FY24, reflecting a YoY growth of 25.1% [2]. - The gross margin is projected to improve from 21.8% in FY23 to 29.8% in FY24 [2]. - Net profit is forecasted to increase significantly from RMB556 million in FY23 to RMB3.368 billion in FY24, marking a growth of 506.2% [2]. - Earnings per share (EPS) is expected to rise from RMB0.47 in FY23 to RMB2.83 in FY24, indicating a growth of 502.2% [2]. Market Dynamics - The report highlights that Willsemi's market share in the global CIS market reached 11% in 2023, with expectations for continued expansion [1]. - The company is positioned to benefit from the increasing number of cameras used in vehicles for safety, with projections indicating that vehicles may commonly utilize 10 or more cameras [1]. - The smartphone CIS segment is expected to grow significantly due to China's new consumer subsidy plan, which offers incentives for purchasing smartphones priced below RMB6,000 [1]. Valuation Metrics - The stock is currently trading at an estimated P/E ratio of 38x for FY24 and 26x for FY25, with a forecasted EPS growth exceeding 40% for 2025 [1][7]. - The target price of RMB130 corresponds to a P/E of 31.7x for FY25 [1].