JCET(SH:600584) Wanlian Securities·2024-03-05 16:00Investment Rating - The investment rating for the company is "Maintain Buy" [5][9]. Core Viewpoints - The company announced on March 4 that its wholly-owned subsidiary, Changdian Technology Co., Ltd., plans to acquire 80% of the shares of Shengdi Semiconductor (Shanghai) Co., Ltd. for approximately USD 62.4 million [2][3]. - Shengdi Semiconductor is one of the largest packaging and testing factories for flash memory storage products globally, with a strong financial performance that is expected to positively impact the company's overall performance post-acquisition [3][4]. - The acquisition is anticipated to deepen the collaboration with storage giant Western Digital, enhancing customer loyalty and positioning the company favorably in the growing storage chip market, which is projected to reach USD 130 billion in 2024 [3][4]. Summary by Sections Financial Performance - Shengdi Semiconductor achieved revenues of CNY 3.498 billion in 2022 and CNY 1.605 billion in H1 2023, accounting for 10.36% and 13.19% of Changdian Technology's revenue during the same periods [3]. - The net profit for Shengdi Semiconductor was CNY 357 million in 2022 and CNY 222 million in H1 2023, with net profit margins of 10.21% and 13.80%, respectively, outperforming Changdian Technology's figures [3]. Market Outlook - The storage chip market is the second-largest segment in the semiconductor industry, accounting for approximately 28%, with NAND flash memory chips representing about 40% of this market [3]. - The compound annual growth rate (CAGR) for NAND flash memory chips is projected to be 8% from 2021 to 2027 [3]. Earnings Forecast - The company is expected to generate revenues of CNY 29.42 billion, CNY 33.97 billion, and CNY 38.16 billion for the years 2023, 2024, and 2025, respectively [4][9]. - The forecasted net profit for the same years is CNY 1.56 billion, CNY 2.73 billion, and CNY 3.47 billion, indicating a significant recovery and growth trajectory [4][9].