Suzhou Centec (SH:688702) Ping An Securities·2025-04-30 11:19Investment Rating - The investment rating for the company is "Recommended" (maintained) with a current stock price of 63.66 yuan [1]. Core Views - The company has increased its R&D investment significantly, leading to a small batch delivery of high-end flagship chips. Despite this, the profit margins are under pressure due to the high R&D costs [7][8]. - In 2024, the company achieved a revenue of 1.082 billion yuan, a year-on-year growth of 4.28%, but reported a net loss attributable to shareholders of 68.26 million yuan, a decrease of 249.52% year-on-year [4][7]. - The company is positioned as a rare domestic Ethernet switch chip design enterprise, with a rich product lineup targeting the mid-to-high-end market. The demand for high-performance switching chips in emerging fields like cloud computing and data centers is expected to drive future growth [8]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of 1.082 billion yuan, with a year-on-year growth of 4.28%. The net profit attributable to shareholders was -68.26 million yuan, a decrease of 249.52% year-on-year [4][7]. - For Q1 2025, the company achieved a revenue of 223 million yuan, a year-on-year decrease of 12.30%, with a net loss of 15.20 million yuan, a decrease of 150.42% year-on-year [4][7]. Revenue and Profitability - The overall gross margin for 2024 was 40.11%, an increase of 3.85 percentage points year-on-year, while the net margin was -6.31%, a decrease of 4.43 percentage points year-on-year [7]. - The company’s R&D expenses reached 428 million yuan in 2024, a growth of 36.40%, reflecting its commitment to high-end chip development [7][8]. Product Development - The company has successfully delivered high-end flagship chips in small batches, with a focus on Ethernet switch chips, which generated 835 million yuan in revenue, a year-on-year increase of 5.54% [8]. - The product range includes high-end chips with port speeds reaching 800G and switching capacities of 12.8Tbps and 25.6Tbps, which are competitive with international products [8]. Market Outlook - The company is expected to benefit from the growing demand for high-speed network communication equipment driven by the AI industry and the need for domestic supply chain independence [8]. - Revenue projections for 2025-2027 are estimated at 1.321 billion yuan, 1.781 billion yuan, and 2.285 billion yuan, respectively, indicating a strong growth trajectory [8].