FMSH(SH:688385) Huachuang Securities·2024-02-25 16:00Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 40.0 CNY per share and 17.6 HKD per share for its A and H shares respectively [2][3]. Core Views - The company's short-term performance is under pressure, but its high-reliability business is expected to continue growing, and demand recovery may drive the company's performance back to a growth trajectory [3]. - The company has a significant technological advantage in high-reliability products, with a strong demand for differentiated products, particularly in the FPGA and PSoC segments [3]. - The MCU and other businesses are gradually recovering from a downturn, with product upgrades expected to lead to renewed growth [3]. Financial Summary - In 2023, the company reported total revenue of 3.536 billion CNY, a slight decrease of 0.07% year-on-year, and a net profit attributable to shareholders of 725 million CNY, down 32.69% year-on-year [3][4]. - For Q4 2023, the company achieved revenue of 798 million CNY, a decline of 4.36% year-on-year and 15.24% quarter-on-quarter, with a net profit of 75 million CNY, down 65.71% year-on-year and 62.84% quarter-on-quarter [3]. - The company's gross margin for Q4 2023 was 50.03%, down 13.49 percentage points year-on-year and 9.73 percentage points quarter-on-quarter [3]. - R&D expense ratio increased to 31.67%, up 10.64 percentage points year-on-year and 7.22 percentage points quarter-on-quarter [3]. Future Projections - The company’s net profit forecasts for 2023-2025 have been adjusted to 725 million CNY, 937 million CNY, and 1.083 billion CNY respectively, with corresponding EPS of 0.88 CNY, 1.14 CNY, and 1.32 CNY [3][4]. - The projected revenue growth rates for 2024 and 2025 are 14.4% and 11.7% respectively [4].