SANAN(SH:600703) Great Wall Securities·2025-05-19 06:28Investment Rating - The report maintains a rating of "Accumulate" for the company [4]. Core Insights - The company demonstrated strong revenue growth in 2024, achieving a total revenue of 16.106 billion yuan, representing a year-on-year increase of 14.61%. However, the net profit attributable to shareholders decreased by 31.02% due to reduced government subsidies and changes in fair value gains [2][9]. - The company's LED business showed resilience, with a gross margin of 11.90% in 2024, up by 1.54 percentage points year-on-year. The gross margin for Q1 2025 was 16.33%, reflecting a year-on-year increase of 1.48 percentage points [2][3]. - The integrated circuit business continued to expand, with a year-on-year revenue growth of 23.86% in 2024, benefiting from recovering market demand and customer shifts in the supply chain [8][9]. Financial Performance Summary - Revenue projections for the company are as follows: 2023A at 14.053 billion yuan, 2024A at 16.106 billion yuan, 2025E at 19.285 billion yuan, 2026E at 22.332 billion yuan, and 2027E at 26.665 billion yuan, with respective growth rates of 6.3%, 14.6%, 19.7%, 15.8%, and 19.4% [1]. - The net profit attributable to shareholders is projected to recover significantly from 0.253 billion yuan in 2024 to 1.064 billion yuan in 2025, with an expected growth rate of 320.9% [1][9]. - The company's return on equity (ROE) is expected to improve from 0.7% in 2024 to 5.5% in 2027, indicating enhanced profitability [1]. Business Segment Performance - The LED segment showed a gross margin increase of 8.79 percentage points in 2024, driven by product structure optimization and cost reduction measures [2][3]. - Emerging markets such as Mini LED and Micro LED are becoming key growth drivers, with applications expanding across various sectors including automotive and consumer electronics [3][8]. - The integrated circuit segment's revenue growth is supported by advancements in GaN and SiC technologies, with a focus on high-demand applications in AI and consumer electronics [8][9].