MDK(SH:688079) Great Wall Securities·2025-08-05 08:41Investment Rating - The report assigns a "Buy" rating to the company, expecting the stock price to outperform the industry index by over 15% in the next six months [4][19]. Core Views - The company is acquiring 100% equity of KEM TECH CORP's subsidiary, Haisholi Optoelectronics Technology (Suzhou) Co., Ltd., for 2 billion KRW, and 100% equity of INNOWAVE VIETNAM CO., LTD. for 1 billion KRW, enhancing its overseas presence and entering the Samsung supply chain [1][2]. - The acquisitions are expected to strengthen the company's position in the optical electronics and semiconductor sectors, particularly in the Korean market, which is a strategic focus for overseas expansion [2]. - The company reported a revenue of 1.49 billion CNY in Q1 2025, a year-on-year increase of 29.02%, with a reduction in net losses, indicating improved profitability [3]. Financial Summary - Revenue projections show a growth trajectory from 321 million CNY in 2023 to 1,298 million CNY in 2027, with a compound annual growth rate (CAGR) of approximately 51.4% in 2024 [1][11]. - The net profit is expected to turn positive by 2026, with estimates of -81 million CNY in 2025, 153 million CNY in 2026, and 225 million CNY in 2027 [1][9]. - The company's return on equity (ROE) is projected to improve from -7.6% in 2024 to 13.5% in 2027, reflecting a recovery in profitability [1][11]. Market Position and Product Development - The company is focusing on semiconductor optoelectronics, MEMS, and precision optics, with products being developed for various applications including communication, consumer electronics, and smart vehicles [9]. - The report highlights the increasing penetration of periscope lenses in high-end smartphones, projecting the market size for periscope cameras in China to reach 287.2 billion CNY by 2025 [8]. - The company has developed several optical components and solutions, including diffraction optical elements and optical micro-lens arrays, which are expected to enhance its competitive edge in the market [8].