VeriSilicon(SH:688521) HTSC·2025-04-27 09:08Investment Rating - The report maintains a "Buy" rating for the company with a target price of 103.67 RMB [7][4]. Core Insights - The company reported a revenue of 2.322 billion RMB for 2024, a slight decline of 0.69% year-on-year, and a net loss of 601 million RMB. In Q1 2025, revenue reached 390 million RMB, marking a year-on-year increase of 22.49% but a quarter-on-quarter decline of 42.01% due to seasonal fluctuations. The gross margin for Q1 2025 was 39.06%, showing a year-on-year improvement of 5.72 percentage points [1][2]. - The company is optimistic about its investments in AIGC and Chiplet technologies, anticipating sustained growth in performance over the medium to long term [1][4]. Summary by Sections Q1 Performance - In Q1 2025, the custom chip business generated revenue of 270 million RMB, a year-on-year increase of 40.5%. The revenue from chip design and mass production was 122 million RMB and 146 million RMB, respectively, both showing growth of over 40% year-on-year. Revenue from system manufacturers, large internet companies, cloud service providers, and automotive clients accounted for 37.30% of total revenue [2]. 2025 Outlook - The company’s order backlog reached a historical high of 2.456 billion RMB in Q1 2025, reflecting a 2.1% increase from the previous quarter. The company is actively advancing in AIGC and Chiplet sectors, launching new IPs optimized for Transformer models and collaborating with Google on IP development for its open-source project [3]. Financial Projections - The report projects a revenue of 2.970 billion RMB for 2025, with a significant growth rate of 27.93%. The net profit for 2025 is expected to be a loss of 105 million RMB, improving to a profit of 13 million RMB in 2026 and 56 million RMB in 2027. The gross margin is forecasted to be 41.84% in 2025 and 43.06% in 2026 [6][20]. Valuation Metrics - The report assigns a price-to-sales (PS) ratio of 12.0x for the custom chip business and 30.0x for the IP licensing business for 2025, reflecting a premium valuation based on the company's competitive advantages in the HPC and AI sectors [4][12]. Market Data - As of April 25, the closing price was 90.90 RMB, with a market capitalization of 45.528 billion RMB. The target price represents a potential upside from the current market price [8].