SG Micro Corp(300661) 中泰证券·2024-05-03 07:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1][6]. Core Views - The company reported a significant improvement in gross margin in Q1 2024, marking the first notable increase during the down cycle, driven by the introduction of high-margin new products and stable pricing for existing products [4][5]. - The overall financial performance is strong, with expectations for continued growth in net profit and revenue, supported by a recovery in demand in the semiconductor industry and the company's competitive advantages [4][5]. - The report highlights the irreversible trend of domestic production, particularly in the automotive analog IC sector, which remains resilient despite global demand challenges [4][5]. Financial Forecast and Valuation - Revenue projections for the company are as follows: - 2023: 2,616 million yuan - 2024E: 3,191 million yuan (growth rate of 22% YoY) - 2025E: 4,000 million yuan (growth rate of 25% YoY) - 2026E: 5,013 million yuan (growth rate of 25% YoY) [2][5]. - Net profit forecasts are: - 2023: 281 million yuan - 2024E: 335 million yuan (growth rate of 19% YoY) - 2025E: 685 million yuan (growth rate of 104% YoY) - 2026E: 1,075 million yuan (growth rate of 57% YoY) [2][5]. - The price-to-earnings (P/E) ratios based on the closing price on April 29, 2024, are projected to be 108.3 for 2024E, 52.9 for 2025E, and 33.7 for 2026E [2][5]. Industry Insights - The report notes a consolidation in the industry as smaller companies face financial pressures, which is expected to benefit leading firms like the one being analyzed [4][5]. - The trend towards domestic production is highlighted as a significant factor, with leading companies benefiting from cost advantages and improved competitive positioning [4][5]. - The semiconductor industry is experiencing a recovery phase, with the company positioned well to capitalize on this trend through its extensive product offerings and customer base [4][5].