Investment Rating - The investment rating for the company is "Outperform the Market" [5][28][31] Core Views - The company is experiencing a short-term revenue decline due to storage price impacts, with a revenue of 1Q25 at 1.543 billion yuan, down 10.62% YoY and 7.58% QoQ. However, a gradual recovery in storage prices is expected in 2Q25, which may lead to performance improvement [1][20][28] - Embedded storage revenue for 2024 reached 4.241 billion yuan, a significant increase of 151.68% YoY, with products entering major client supply chains. AI-related products are also seeing rapid revenue growth, particularly in AI glasses, which are expected to grow over 500% YoY in 2025 [2][28] - The company is making steady progress in wafer-level advanced packaging, which is anticipated to drive long-term growth. The enterprise-level and automotive-grade storage segments are also expanding successfully [3][28] Summary by Sections Financial Performance - 1Q25 revenue was 1.543 billion yuan, with a net profit of -216 million yuan, reflecting a significant decline in profitability due to increased R&D expenses and inventory write-downs [1][28] - The company forecasts a gradual recovery in revenue, with expected net profits of 178 million yuan, 200 million yuan, and 382 million yuan for 2025, 2026, and 2027 respectively [28][29] Revenue Breakdown - Embedded storage is projected to generate revenues of 5.439 billion yuan, 6.459 billion yuan, and 7.363 billion yuan from 2025 to 2027 [28] - PC storage revenue is expected to be 2.206 billion yuan, 2.283 billion yuan, and 2.363 billion yuan for the same period [28] - Automotive-grade storage revenue is anticipated to grow to 155 million yuan, 294 million yuan, and 418 million yuan from 2025 to 2027 [28] Market Trends - The global storage market is experiencing a cyclical downturn, with NAND Flash prices expected to stabilize in 2Q25 after a decline in 1Q25. The company is well-positioned to benefit from this recovery [20][24] - The demand for AI-related storage products is increasing, particularly in the context of AI glasses and high-performance PC storage solutions [2][3][28]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][28][31] Core Views - The company is experiencing a short-term revenue decline due to storage price impacts, with a revenue of 1Q25 at 1.543 billion yuan, down 10.62% YoY and 7.58% QoQ. However, a gradual recovery in storage prices is expected in 2Q25, which may lead to performance improvement [1][20][28] - Embedded storage revenue for 2024 reached 4.241 billion yuan, a significant increase of 151.68% YoY, with products entering major client supply chains. AI-related products are also seeing rapid revenue growth, particularly in AI glasses, which are expected to grow over 500% YoY in 2025 [2][28] - The company is making progress in enterprise-level and automotive-grade storage, with advanced wafer-level packaging expected to drive long-term growth. The company has passed various tests and is set to meet advanced storage packaging demands [3][28] Summary by Sections Financial Performance - 1Q25 revenue was 1.543 billion yuan, with a net profit of -216 million yuan, reflecting a significant decline in profitability due to increased R&D expenses and inventory write-downs [1][28] - Revenue projections for 2025-2027 are 1.78 billion, 2.00 billion, and 3.82 billion yuan respectively, with corresponding PE ratios of 156, 139, and 73 [3][28] Revenue Breakdown - Embedded storage is projected to generate revenues of 5.439 billion, 6.459 billion, and 7.363 billion yuan from 2025 to 2027, driven by a recovery in storage prices and increased shipments [28] - PC storage revenue is expected to be 2.206 billion, 2.283 billion, and 2.363 billion yuan for the same period, benefiting from a gradual market recovery [25][28] - Automotive-grade storage is anticipated to grow to 1.55 billion, 2.94 billion, and 4.18 billion yuan from 2025 to 2027, as customer adoption increases [26][28] Market Trends - The global storage market is experiencing a cyclical downturn, with NAND Flash prices expected to stabilize in 2Q25 after a decline in 1Q25. The company anticipates a recovery in prices due to inventory adjustments and increased demand from OEMs [20][24][28] - The company is well-positioned in the supply chains of major clients across various sectors, including AI, automotive, and consumer electronics, which supports its growth outlook [2][3][28]

Core Viewpoint - The management of Bawei Storage is optimistic about the company's future development, with executives committing not to sell their shares in the secondary market within the year following the planned share reduction [1] Company Summary - Bawei Storage's executives plan to reduce their holdings, with the total shares to be sold being minimal compared to the company's total share capital, thus having a limited impact [2] - The company has seen significant growth in embedded storage revenue, with a more than doubling increase expected in 2024, indicating a positive trend in demand diversification within the storage industry [2] - Bawei Storage's storage packaging technology is leading domestically, particularly in the AI glasses sector, providing a competitive edge in low power consumption and fast response times [3] - The company is enhancing its advanced packaging capabilities, which will support both its storage product development and meet customer demands for integrated storage solutions [3] Industry Summary - The storage industry is expected to experience healthy growth with the emergence of new products such as AI terminals and intelligent robots, moving away from a reliance on traditional smart terminals [2] - Localized demand from downstream terminal enterprises in China is becoming increasingly clear amid global trade disputes, further supporting the industry's growth [2]