China Post Securities·2025-06-17 09:37Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within the next six months [8][9]. Core Insights - The company has demonstrated stable capacity utilization, with industrial and automotive revenue increasing by over 20% quarter-on-quarter. The gross margin for Q1 2025 is reported at 22.5%, remaining stable, while capacity utilization reached 89.6%, up by 4.1 percentage points [3]. - The company achieved a sales revenue of $2.247 billion in Q1 2025, reflecting a quarter-on-quarter growth of 1.8%. The revenue breakdown shows wafer revenue accounting for 95.2% and other revenue for 4.8%, with wafer revenue growing nearly 5% quarter-on-quarter [3]. - The automotive electronics segment has seen significant growth, with revenue from industrial and automotive applications rising from 8% to 10% of total revenue, driven by advancements with key clients in the automotive sector [3]. - The company anticipates a quarter-on-quarter revenue decline of 4% to 6% for Q2 2025 due to production fluctuations, with gross margin guidance set between 18% and 20% [4]. - The company plans to expand its monthly capacity for 12-inch wafers by approximately 50,000 pieces annually, with an investment of around $7.5 billion, primarily for equipment purchases [5]. Financial Projections - Revenue projections for the company are estimated at 67.7 billion yuan, 77.9 billion yuan, and 89.6 billion yuan for the years 2025, 2026, and 2027, respectively. The net profit attributable to the parent company is expected to be 5.1 billion yuan, 6.2 billion yuan, and 7.4 billion yuan for the same years [9][11]. - The report indicates a projected price-to-book (PB) ratio of 4.31, 4.15, and 3.96 for the years 2025, 2026, and 2027, respectively, suggesting a favorable valuation trend [9].