GigaDevice(603986) 民生证券·2025-01-24 03:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its leading position in the niche storage industry and the growth potential from new product developments [3][5][98]. Core Insights - The company, Zhaoyi Innovation, is a leading player in the niche storage market, focusing on memory chips, microcontrollers (MCUs), and sensors. Its storage business is the core growth driver, with a significant market share in NOR Flash and a leading position in the domestic MCU market [1][10][12]. - The demand for niche storage is being driven by the rise of edge AI computing, which requires high bandwidth and low power consumption solutions. The company is also exploring customized storage solutions to meet these emerging needs [2][72]. - The financial forecasts predict a recovery in revenue and profit margins, with expected net profits of 1.09 billion, 1.56 billion, and 2.24 billion yuan for 2024, 2025, and 2026 respectively, reflecting significant growth from 2023 [3][4][92]. Summary by Sections Company Overview - Zhaoyi Innovation is a semiconductor design company established in 2005, focusing on memory products, microcontrollers, and sensors. It ranks second globally in NOR Flash market share and is the leading supplier of 32-bit Arm MCUs in China [1][10][12]. Storage Market Analysis - The storage market is expected to grow from 256 billion by 2028, with a compound annual growth rate (CAGR) of 10%. The company is well-positioned in the NOR Flash segment, which is projected to grow from 4.1 billion by 2028 [22][24]. - The company has a complete product line in NOR Flash, covering capacities from 512Kb to 2Gb, and is expanding into automotive and industrial applications [28][39]. MCU Market Insights - The global MCU market is projected to grow from 38.8 billion by 2029, with automotive applications being a significant driver. The company holds a leading position in the domestic 32-bit MCU market and is focusing on expanding its automotive product offerings [2][78][85]. Financial Projections - The company is expected to see a revenue increase from 5.76 billion yuan in 2023 to 11.26 billion yuan in 2026, with a corresponding improvement in net profit margins. The projected PE ratios for 2024, 2025, and 2026 are 80, 56, and 39 respectively, indicating a favorable valuation compared to peers [3][4][92][98].