USC(SH:688403) Great Wall Securities·2025-09-18 05:13Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index in the next six months [4][18]. Core Views - The company has experienced significant revenue growth in the first half of 2025, driven by the recovery in consumer electronics demand, particularly for large-size panels and AMOLED products, alongside the release of new production capacity from fundraising projects [2][3]. - The company's gross margin improved to 23.53% in 25H1, up 3.63 percentage points year-on-year, attributed to increased order volumes and an improved product mix [2]. - The report highlights the ongoing shift of the display driver chip packaging and testing business from Taiwan and South Korea to mainland China, benefiting domestic companies like the report's subject [3][9]. Financial Summary - The company reported a revenue of 866 million yuan in 25H1, a year-on-year increase of 28.58%, and a net profit of 96 million yuan, up 60.94% year-on-year [1][2]. - The projected revenues for the company are expected to grow from 1,238 million yuan in 2023 to 2,546 million yuan by 2027, with a compound annual growth rate (CAGR) of approximately 18% [1]. - The net profit is projected to increase from 196 million yuan in 2023 to 361 million yuan by 2027, with significant growth expected in 2025 and 2026 [1][9]. Industry Insights - The report notes that the recovery in consumer electronics is expected to continue, with a notable increase in shipments of mid-to-large size products such as PCs, tablets, and TVs [3]. - The domestic display driver chip industry is anticipated to benefit from increased production capacity and market share among local manufacturers, particularly in the AMOLED segment [3][9]. - The company is positioned to expand its high-end packaging and testing capacity, which is crucial for meeting the growing demand in the display driver chip market [3][9].