GigaDevice(603986) 国泰君安·2024-04-26 04:31Investment Rating - The report maintains an "Overweight" rating for the company, with a target price adjusted to 95.36 CNY [1]. Core Views - The company's performance exceeded expectations, indicating a turning point with accelerated price recovery in the marginal market [1]. - The storage and MCU sectors are at the bottom of the cycle, with production capacity gradually reaching full utilization, benefiting from price increases and new product iterations, which are expected to drive significant growth in performance [1]. - The report highlights a recovery in market demand, with a year-on-year revenue increase of 21.32% and a net profit increase of 36.45% [1]. Summary by Sections Financial Performance - The company reported a revenue of 16.27 billion CNY for Q1, with a gross margin of 38.16%, reflecting a sequential increase of 3.66 percentage points [1]. - The net profit attributable to shareholders was 2.05 billion CNY, with an EPS of 0.24 CNY for 2023A, projected to rise to 1.49 CNY in 2024E [1]. - The operating profit margin is expected to improve from 2.9% in 2022A to 12.8% in 2023A, and further to 20.1% by 2026E [1]. Market Position and Competitive Landscape - The company is positioned to benefit from the domestic substitution process and the recovery of demand in the consumer electronics sector, particularly in smartphones [1]. - The report notes that the company has a strong market share in niche chips, with a focus on DRAM and SLC NAND products, which are expected to see price increases due to recovering demand [1]. Valuation Metrics - The report assigns a PE ratio of 64 for 2024, reflecting a premium over the average valuation of the storage industry, which is noted to be around 54 times [1]. - The company’s valuation is supported by its expected performance recovery and product upgrades, with a target price set based on these factors [1].