GigaDevice(SH:603986) Huajin Securities·2024-05-23 12:00Investment Rating - The investment rating for the company is "Buy - A" [1][2] Core Views - The company has turned profitable in Q1 2024, driven by capacity switching and demand recovery in the niche storage market [1] - The company is expected to see a gradual increase in DRAM prices due to a shift in production capacity towards high-value products like HBM and DDR5, with an anticipated shortage in DDR4 supply [1] - The company reported a significant drop in revenue in 2023 but has shown signs of recovery in Q1 2024, with a year-on-year revenue increase of 21.32% [1][2] Summary by Sections Financial Performance - In 2023, the company's storage chip revenue was 4.077 billion yuan, a year-on-year decrease of 15.51%, with a gross margin of 32.99%, down 7.10 percentage points [1] - The company achieved a revenue of 5.761 billion yuan in 2023, a year-on-year decrease of 29.14%, and a net profit of 161 million yuan, down 92.15% [2][3] - In Q1 2024, the company reported a revenue of 1.627 billion yuan, a year-on-year increase of 21.32%, and a net profit of 205 million yuan, a year-on-year increase of 36.45% [1][2] Market Outlook - The company expects to achieve mass production of DDR3 4Gb/2Gb products in 2024, with DDR4 8Gb products already in trial production [1] - The company anticipates that by the end of 2024, approximately 80% of DRAM production capacity will be switched to DDR5, leading to a potential shortage in DDR4 supply [1] - The company is actively expanding its MCU product line and has successfully launched over 600 MCU products, with a focus on automotive applications [2] Revenue Projections - The company forecasts revenues of 7.320 billion yuan in 2024, 9.077 billion yuan in 2025, and 10.529 billion yuan in 2026, with growth rates of 27.1%, 24.0%, and 16.0% respectively [2][3] - The projected net profit for 2024 is 992 million yuan, with significant growth expected in subsequent years [2][3]