ArcSoft(688088) 华泰证券·2025-04-15 09:25Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 60.13 RMB [8][9]. Core Views - The company is positioned as a leader in edge AI algorithms, with continuous high growth in performance driven by rapid revenue increases in smart driving and smartphones, alongside enhanced cost control measures [1][2]. - The company is expected to enter a high growth phase from 2025 to 2027, with significant contributions from both smart smartphones and smart automotive sectors [1][3]. Revenue and Profitability - The company forecasts a revenue of 815.17 million RMB for 2024, representing a year-on-year growth of 21.62%, and a net profit of 176.69 million RMB, reflecting a year-on-year increase of 99.67% [7]. - For Q1 2025, the revenue is projected at 209 million RMB, with a year-on-year growth of 13.77%, and a net profit of 49.66 million RMB, showing a year-on-year increase of 45.35% [1][2]. Segment Performance - Smart terminal revenue is expected to reach 675 million RMB in 2024, growing by 16.17% year-on-year, while smart driving and other IoT revenues are projected to grow by 71.20% to 127 million RMB in the same year [2]. - The gross margins for 2024 and Q1 2025 are forecasted to be 90.43% and 89.84%, respectively, indicating strong profitability [2]. Future Growth Drivers - The company is actively exploring new growth areas such as AI glasses, robotics, and smart commercial photography, which are anticipated to become significant contributors to future revenue [4]. - The smart automotive sector is expected to continue its high growth trajectory, with a focus on domestic and international market expansion [3][4]. Earnings Forecast and Valuation - The earnings per share (EPS) estimates for 2025 and 2026 are 0.71 RMB and 0.98 RMB, respectively, with a new estimate for 2027 at 1.38 RMB [5][7]. - The target price is based on a price-to-earnings (PE) ratio of 85 times for 2025, reflecting an increase in overall sector valuations [5].