Loongson Technology(688047) 东兴证券·2025-02-18 04:19Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook despite short-term performance challenges [2][12]. Core Insights - The company is experiencing short-term pressure on its performance, with a projected revenue of approximately 506 million yuan for 2024, remaining stable compared to the previous year. However, the net profit attributable to shareholders is expected to decline significantly to -619 million yuan, a decrease of about 87.89% year-on-year [3][4]. - The company is actively exploring AI integration with its products, achieving local deployment of AI models, which is expected to enhance operational efficiency and align with industry trends [5][12]. Summary by Sections Financial Performance - The company anticipates a revenue of 5.06 billion yuan for 2024, which is roughly flat year-on-year. The net profit is expected to decrease by approximately 290 million yuan compared to the previous year, resulting in a projected loss of 619 million yuan [3][4]. - The company has seen a significant decline in its solution business, while chip product revenues have increased substantially. The overall gross margin remains under pressure due to high fixed costs and reduced contributions from industrial control chip revenues [4][6]. Market Position and Strategy - The company is recognized as a leader in domestic CPU development, focusing on processor and supporting chip research, sales, and services. It has established a comprehensive market collaboration in various sectors, including electronic government, energy, transportation, finance, telecommunications, and education [6][12]. - The company is leveraging its new products' cost-performance advantages to capture opportunities in the recovering electronic government market, aiming for revenue growth in the latter half of 2024 [4][6]. Future Outlook - The company has adjusted its net profit forecasts for 2024-2026 to -618 million yuan, 13 million yuan, and 89 million yuan, respectively, reflecting a cautious but optimistic long-term growth potential [12][13]. - The current stock price corresponds to a price-to-sales (PS) ratio of 105, 80, and 58 for 2024-2026, indicating a premium valuation relative to expected earnings [12][13].