SG Micro Corp(SZ:300661) Dongguan Securities·2025-03-31 07:09Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is a leading domestic player in the analog chip sector, with a comprehensive product range driving growth [7] - The company has shown steady growth in operating performance, with a revenue CAGR of 30.42% from 2017 to 2023, despite facing challenges in 2023 due to industry downturns [7][23] - The domestic analog chip market has significant room for domestic substitution, particularly driven by AI terminals and automotive electronics [7][41] - The company is expected to benefit from industry recovery in the short term and product expansion in the long term, with projected earnings per share of 1.00, 1.48, and 2.26 yuan for 2024-2026 [7] Summary by Sections 1. Domestic High-End Analog Chip Leader - The company focuses on the research, design, production, and sales of analog chips, covering signal chain and power management sectors [16] - The product line includes over 5,200 models across 32 categories, with applications in various fields such as consumer electronics, industrial control, IoT, AI, and automotive electronics [16][23] - The company operates on a fabless model, outsourcing production to specialized manufacturers, primarily TSMC [17] 2. Steady Growth in Operating Performance - Revenue increased from 532 million yuan in 2017 to 2.616 billion yuan in 2023, with a net profit growth from 94 million yuan to 281 million yuan during the same period [23] - In 2023, the company faced a revenue decline of 17.94% and a net profit decline of 67.86% due to weak demand in consumer electronics and industrial control sectors [23][24] - The company anticipates a rebound in net profit for 2024, projecting a range of 449 million to 533 million yuan, representing a growth of 60% to 90% year-on-year [24] 3. Market Expansion and Domestic Substitution - The global analog chip market was valued at over 80 billion USD in 2023, with significant market share held by foreign companies, indicating a broad space for domestic substitution [7][41] - The automotive electronics sector is expected to drive demand for analog chips, with electric vehicles requiring significantly more chips than traditional vehicles [55][64] - The company has been actively expanding its product offerings and customer base through internal R&D and external acquisitions, positioning itself to lead in the domestic substitution process [7][41] 4. Investment Recommendations - The company is positioned as a leader in the domestic analog chip market, with a comprehensive product range and a strong focus on R&D and acquisitions [7] - Short-term outlook is positive due to industry recovery, while long-term growth is supported by product expansion and structural improvements [7] - The projected earnings for 2024-2026 suggest a favorable valuation, maintaining the "Buy" rating [7]