USC(SH:688403) Bank of China Securities·2025-04-01 12:52Investment Rating - The report maintains an "Accumulate" rating for the company [1][7] Core Views - The company is experiencing a period of margin pressure due to increased fixed costs from expansion projects, while the utilization rate has declined year-on-year. Despite these challenges, the demand for driver chips is stabilizing, and the company is actively pursuing technological upgrades and new market segments such as automotive displays and AR/VR [7][4] - The report highlights that the industry is facing intensified competition, but the company's focus on technology upgrades is expected to drive long-term growth [7][4] Financial Summary - The company's revenue for 2024 is projected to be approximately RMB 1.501 billion, representing a year-on-year growth of 21% [7] - The gross margin for 2024 is expected to be around 21.8%, down by 4.7 percentage points year-on-year [7] - The net profit attributable to the parent company for 2024 is estimated at RMB 160 million, reflecting a year-on-year decrease of 18.5% [7] - The report provides earnings per share (EPS) estimates of RMB 0.23 for 2025 and RMB 0.29 for 2026, with a downward adjustment of 26.6% for 2025 compared to previous forecasts [6][7] - The company's total market capitalization is approximately RMB 8.17 billion, with projected price-to-earnings (PE) ratios of 41.8 for 2025 and 33.1 for 2026 [7][6] Industry Context - The report notes that the driver chip industry is gradually stabilizing, aided by government policies aimed at boosting consumer electronics, which are expected to enhance demand for driver chips [7] - The domestic production rate for LCD driver chips has reached 34%, but high-end 28nm OLED driver chips remain dominated by companies like Samsung LSI and Novatek [7] - The report emphasizes the importance of technological advancements, particularly in new materials and processes, to maintain competitiveness in the evolving market landscape [7]