Shannon Semi(SZ:300475) GOLDEN SUN SECURITIES·2025-09-22 03:32Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its future performance [9]. Core Views - The company is positioned as a leading player in the semiconductor distribution sector, leveraging a dual strategy of "distribution + products" to drive growth [1][16]. - The company has seen significant revenue growth, with a 119% year-on-year increase in H1 2025, driven by rising market demand and product price increases [2][27]. - The enterprise storage market is expected to grow significantly, with a projected CAGR of approximately 18.7% from 2024 to 2028, indicating substantial opportunities for domestic players [3][4]. Summary by Sections Company Overview - The company, formerly known as Anhui Julong Transmission Technology Co., Ltd., transitioned into the semiconductor distribution field after acquiring United Chuangtai in 2021 and rebranding as Xiangnon Xinchuan [1][16]. - It has established partnerships with major semiconductor manufacturers, including SK Hynix and AMD, enhancing its market position [5][17]. Financial Performance - In H1 2025, the company achieved revenue of 171 billion yuan, a 119% increase year-on-year, and a net profit of 1.6 billion yuan, reflecting a 1% growth [2][27]. - The company's gross margin for H1 2025 was 2.7%, down 3.3 percentage points year-on-year, primarily due to declining DRAM prices [29]. Market Trends - The enterprise storage market is projected to reach a size of 87.8 billion USD by 2025, with significant growth driven by AI server demand [3][4]. - The company is expanding its product offerings in enterprise-level SSDs and DRAM, with a focus on meeting the growing demand for high-capacity, low-power solutions [4][31]. Strategic Initiatives - The establishment of the joint venture Shenzhen Haipu Storage with SK Hynix and Dapu Microelectronics aims to fill gaps in the enterprise DRAM market [1][4]. - The company has implemented a stock incentive plan to align the interests of management and employees with long-term growth objectives, indicating confidence in future performance [33][34].