Willsemi(603501) 浦银国际证券·2025-04-30 12:23Investment Rating - The report maintains a "Buy" rating for the company, Weir Shares (603501.CH), with a target price of RMB 153.0, indicating a potential upside of 19.1% from the current price of RMB 128.4 [1][5]. Core Insights - The company has entered a strong product cycle, with multiple segments driving business growth in 2025. Key growth drivers include increased penetration of automotive CIS due to BYD's push for smart driving equality, growth in automotive simulation products, expansion in high-end mobile CIS market share, and a potential breakeven in the touch display business this year. Long-term growth expectations remain optimistic as multiple business segments have opened up potential growth ceilings [1][2]. Financial Performance - In Q1 2025, the company reported revenue of RMB 6.472 billion, a year-on-year increase of 15%, marking a historical high for Q1. The gross margin improved to 31.0%, up 3.1 percentage points year-on-year, driven by product mix improvement and supply chain optimization. Net profit reached RMB 866 million, a 55% increase year-on-year [2][10]. - The company has adjusted its earnings forecasts for 2025 and 2026 upwards based on Q1 performance and future outlook [2][11]. Valuation - The report employs a DCF valuation method, assuming a risk-free rate of 2.2% and a growth rate of 25%-30% for 2030-2034, with a perpetual growth rate of 3%. The calculated WACC is 11.3%, leading to a target price of RMB 153.0 [2][12][13]. - The forward P/E ratio is currently at 30.0x, which is below the historical average, indicating potential for upward valuation [1][18]. Earnings Forecast - The earnings forecast for 2025 estimates revenue of RMB 31.094 billion, with a year-on-year growth rate of 21%. The gross margin is projected to be 31.8%, and net profit is expected to reach RMB 4.436 billion, reflecting a 33% increase year-on-year [4][11]. Market Context - The company is positioned favorably within the smartphone and automotive sectors, with strong demand growth anticipated. The competitive landscape is also noted, with the company expected to maintain its market share and benefit from new product launches [25][26].