卓胜微：LT prospects intact; Maintain HOLD on continued margin pressure-20250401

Investment Rating - The report maintains a HOLD rating for Maxscend, with a target price adjusted downward to RMB82.00 from RMB86.00, reflecting a potential upside of 2.3% from the current price of RMB80.15 [1][3]. Core Insights - Maxscend's FY24 revenue increased by 2.5% YoY to RMB4.5 billion, which was below CMBI estimates and Bloomberg consensus by 2% and 1% respectively. However, net profit saw a significant decline of 64.2% YoY to RMB402 million, missing estimates by 28% and 21% [1][2]. - The gross profit margin (GPM) and net profit margin (NPM) decreased by 7.0 percentage points and 16.7 percentage points respectively, attributed to margin pressure from the subsidiary Xinzhuo's ramp-up as the company shifts from a fabless model to a fab-lite strategy [1][2]. - Despite the near-term margin pressures, the long-term growth prospects for Maxscend remain positive as it develops platform-level manufacturing capabilities and strategic supply chain independence [1]. Financial Performance Summary - FY24 revenue was RMB4,487 million, with a YoY growth of 2.5%, while FY25 revenue is estimated to grow by 16.3% to RMB5,219 million [2][8]. - The gross margin for FY24 was reported at 39.5%, down from 46.4% in FY23, with expectations of a slight recovery to 40.2% in FY25 [2][8]. - Net profit for FY24 was RMB401.9 million, with a forecasted recovery to RMB587.3 million in FY25, reflecting a growth of 46.1% [2][8]. Market Position and Future Outlook - Module sales, which account for 42% of total revenue, grew by 18.6% YoY in FY24, while discrete sales declined by 7.6% YoY. The module business is expected to be a key growth driver, projected to grow by 25% YoY in FY25 [7][8]. - The report indicates that Maxscend will continue to face margin headwinds, particularly in the first half of FY25, but anticipates a gradual recovery in the second half due to seasonality and emerging demand from AI edge devices [7][8]. - The target price of RMB82.00 is based on a rolled-over 45x 2026E P/E, which is 10% higher than the average of peers at 40.7x, considering Maxscend's leading position in the RFFE market and its role in semiconductor localization [1][8].