Espressif Systems(SH:688018) Yin He Zheng Quan·2025-09-03 05:38Investment Rating - The report maintains a "Recommended" rating for the company, with projected revenue growth and profitability improvements [6]. Core Insights - The company has shown steady improvement in gross margin and rapid growth in its module business, with a projected revenue increase from 20.07 billion yuan in 2024 to 40.45 billion yuan in 2027 [2][6]. - The company achieved a revenue of 12.46 billion yuan in the first half of 2025, a year-on-year increase of 35.35%, and a net profit of 2.61 billion yuan, up 72.29% year-on-year [6]. - The module and development kit segment generated 7.53 billion yuan in revenue, representing a 41.61% year-on-year growth, while the chip segment saw a revenue of 4.84 billion yuan, a 27.05% increase [6]. - The overall gross margin improved to 45.20%, up 2.01 percentage points year-on-year, with the second quarter of 2025 showing a gross margin of 46.69% [6]. - The company is positioned as a professional chip design enterprise in the IoT sector, focusing on "processing + connectivity" and plans to continue increasing R&D investment to enhance product performance and market share [6]. Financial Forecasts - Projected financial metrics for the company are as follows: - Revenue (billion yuan): 20.07 (2024A), 26.65 (2025E), 33.16 (2026E), 40.45 (2027E) [2][8] - Net profit (billion yuan): 3.39 (2024A), 5.17 (2025E), 6.83 (2026E), 8.88 (2027E) [2][8] - Gross margin (%): 43.91 (2024A), 44.62 (2025E), 44.72 (2026E), 45.85 (2027E) [2][8] - Diluted EPS (yuan): 2.17 (2024A), 3.30 (2025E), 4.36 (2026E), 5.66 (2027E) [2][8] - The company’s PE ratio is projected to decrease from 88.27 in 2024 to 33.75 in 2027, indicating improving valuation metrics [2][8].