Nexchip Semiconductor Corporation(688249) Orient Securities·2025-03-26 05:03Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 34.52 CNY based on a projected PB of 3.05 times for 2025 [2][5]. Core Views - The company is experiencing performance growth driven by capacity expansion and product structure optimization, benefiting from an improving industry outlook [1][27]. - The semiconductor market is showing strong growth, with a significant increase in demand for foundry services, particularly in China, which is expected to continue [8][45]. - The company is focusing on expanding its production capacity and optimizing its product mix, particularly in the automotive chip market, which is seeing robust demand [8][57]. Financial Forecast and Investment Suggestions - The company is projected to achieve earnings per share of 0.27 CNY, 0.40 CNY, and 0.59 CNY for the years 2024, 2025, and 2026 respectively, with a significant recovery in net profit expected [4][2]. - Revenue is expected to grow from 92.49 billion CNY in 2024 to 143.91 billion CNY in 2026, reflecting a compound annual growth rate (CAGR) of approximately 23% [4][2]. - The company’s gross margin is anticipated to improve to 25.6% in 2024, up from previous levels, indicating a recovery in profitability [31][4]. Company Overview - The company is a leading 12-inch wafer foundry in China, established in 2015, with a total planned investment exceeding 100 billion CNY and a designed capacity of 320,000 wafers per month [13][16]. - It specializes in semiconductor wafer manufacturing services, offering various process nodes from 150nm to 55nm, with ongoing advancements in technology [13][16]. - The company has seen a significant increase in its market share, ranking third among domestic foundries and ninth globally as of Q4 2024 [14][13]. Market Trends - The global semiconductor market is projected to grow significantly, with the foundry market expected to reach 139.4 billion USD by 2024, driven by advancements in technologies such as 5G and AI [45][51]. - The domestic integrated circuit market in China is also expanding rapidly, with a projected market size of 1.43 trillion CNY in 2024, indicating strong growth potential for local foundries [64][71]. - The demand for automotive chips is increasing, with the company actively participating in the automotive chip market and forming alliances to enhance its ecosystem [8][57].