Nexchip Semiconductor Corporation(SH:688249) Southwest Securities·2024-05-08 07:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 17.60 CNY over the next six months [1][11]. Core Insights - The company's Q1 2024 performance exceeded expectations, with a significant increase in revenue from 55nm products, indicating a recovery in market demand and improved operational efficiency [2][11]. - The company reported a total revenue of 7.24 billion CNY for 2023, a decrease of 27.9% year-on-year, but Q4 2023 showed a recovery with a revenue of 2.23 billion CNY, up 42.9% quarter-on-quarter [2][11]. - For Q1 2024, the company achieved a revenue of 2.23 billion CNY, representing a year-on-year growth of 104.4% [2][11]. Summary by Sections Financial Performance - The company’s revenue for 2023 was 7.24 billion CNY, with a net profit of 211.63 million CNY, down 93.1% year-on-year. The Q1 2024 revenue was 2.23 billion CNY, with a net profit of 80 million CNY, up 124% year-on-year [2][3][11]. - The gross margin for 2023 was 21.6%, while Q1 2024 saw an increase to 25.0% [2][11]. - The company’s cash flow from operating activities improved significantly in Q1 2024, with a net cash flow of 400 million CNY, up 197.2% year-on-year [2][11]. Product and Market Development - The product structure has been optimized, with the revenue share of 55nm products increasing significantly. In 2023, 55nm products accounted for 7.9% of total revenue, which further increased to 10.2% in Q1 2024 [2][11]. - The company is actively expanding its market presence in the OLED driver chip sector and has made progress in developing 40nm and 28nm technologies [2][11]. Earnings Forecast - The company is expected to achieve net profits of 880 million CNY, 1.38 billion CNY, and 1.58 billion CNY for 2024, 2025, and 2026, respectively, with corresponding growth rates of 317.8%, 55.6%, and 14.8% [3][11]. - The projected revenue for 2024 is 10.10 billion CNY, reflecting a growth rate of 39.4% [3][11]. Valuation - The report assigns a PE ratio of 40 for 2024, leading to a target price of 17.60 CNY, based on the company's strong market position and growth potential in the display driver IC sector [11][12].