Core Viewpoint - The company is positioned as a leading player in the global data processing and interconnect chip design industry, focusing on high-performance chip solutions for cloud computing and artificial intelligence, with a strong emphasis on the DDR5 memory interface and high-performance "capacity" chips [1][3][5]. Group 1: Company Overview - The company was established in 2004 and went public on the STAR Market in 2019, specializing in high-performance, low-power chip solutions for cloud computing and AI [3]. - The product lines include interconnect chips and server platforms, with major clients such as Samsung, SK Hynix, and Micron Technology [3]. Group 2: Main Business - The main business consists of interconnect chips and server platforms, with interconnect chips contributing 92% of revenue in 2024 [5]. - Revenue from interconnect chips grew from 1.749 billion to 3.349 billion yuan from 2018 to 2024, with a compound annual growth rate (CAGR) of 68% [5]. Group 3: Financial Analysis - The company’s revenue increased from 1.758 billion yuan in 2018 to an expected 3.639 billion yuan in 2024, with a CAGR of 13% [13]. - In the first half of 2025, the company achieved a revenue of 2.411 billion yuan, a year-on-year increase of 52.12%, and a net profit of 634 million yuan, up 71.40% [13][17]. Group 4: DDR5 Acceleration - The penetration rate of DDR5 is expected to reach 30% in 2023 and 50% by the end of 2024, with significant growth driven by AI and high-performance computing demands [25][20]. - The company has already surpassed DDR4 in DDR5 product shipments, indicating a strong market position [38]. Group 5: High-Performance "Capacity" Products - The company focuses on four AI high-performance "capacity" chips, including PCIe Retimer, MRCD/MDB, CKD, and MXC, to address interconnect bottlenecks in AI infrastructure [10][40]. - The PCIe Retimer market is projected to grow from $0.70 billion in 2022 to $3.95 billion in 2024, with a forecasted CAGR of 26% from 2025 to 2030 [49]. Group 6: Investment Forecast and Recommendations - The company is expected to achieve revenues of 5.806 billion, 7.710 billion, and 9.893 billion yuan in 2025, 2026, and 2027, respectively, with year-on-year growth rates of 59.54%, 32.80%, and 28.32% [55][56]. - The net profit forecast for the same years is 2.436 billion, 3.301 billion, and 4.242 billion yuan, with corresponding growth rates of 72.54%, 35.51%, and 28.51% [55].

Core Viewpoint - Recently, Lianqi Technology Co., Ltd. updated its prospectus for listing on the Hong Kong Stock Exchange, aiming to become another company with an "A+H" layout. As of the report, Lianqi Technology's A-share market value is 98.4 billion yuan [1]. Company Overview - Lianqi Technology, founded in 2004 by semiconductor expert Yang Chonghe, specializes in memory interface chips, which are crucial for data access speed and stability in servers [1][2]. - The company is positioned as the largest supplier of memory interconnect chips globally, with a market share of 36.8% projected for 2024 [1]. Historical Development - Yang Chonghe has a rich background in semiconductor design, having worked at National Semiconductor and co-founding a venture capital-backed IC design company, which was later acquired by IDT for $85 million [2]. - Lianqi Technology initially focused on memory interface chips, recognizing the growing importance of data connectivity as cloud computing emerged [2]. - The company faced significant challenges in gaining market acceptance due to the need for certification from CPU, storage, and server manufacturers [2]. Financial Performance - From 2016 to 2018, Lianqi Technology's revenue grew from 845 million yuan to 1.758 billion yuan, with net profits increasing from approximately 93 million yuan to 737 million yuan [6]. - In 2019, the company went public on the STAR Market, with its market value soaring by 272.83% on the first day of trading [6]. - By 2024, Lianqi Technology's revenue is expected to reach 3.639 billion yuan, a year-on-year increase of 59.2%, with net profit projected at 1.412 billion yuan, up 213.1% [6]. Market Position and Trends - The memory interface chip market is highly concentrated, with only three companies, including Lianqi Technology, capable of mass-producing DDR4/DDR5 chips, holding over 93% market share [7]. - The Chinese memory interface chip market is projected to approach 15 billion yuan by 2025, driven by rising demand for servers and data centers [7]. - Lianqi Technology has been at the forefront of DDR5 technology, rapidly advancing from the first to the fourth generation of DDR5 RCD chips within two years [8]. Future Outlook - The global HBM memory market is expected to reach approximately $15 billion by 2025, with a growth rate exceeding 50%, indicating a strong demand for high-bandwidth memory solutions [9].

Core Viewpoint - The company focuses on high-speed interconnect chips, with computing power chips becoming a new growth engine, achieving significant revenue and profit growth in recent quarters [3][4][5]. Financial Performance - In 2024, the company achieved revenue of 3.639 billion yuan (YoY +59%), with interconnect chips and server platforms accounting for 92% and 8% of revenue respectively. The CAGR from 2016 to 2024 was 20% [5][18]. - The net profit attributable to shareholders reached 1.412 billion yuan (YoY +213%), with a CAGR of 41% from 2016 to 2024 [5][18]. - In Q1 2025, the company reported revenue of 1.222 billion yuan (YoY +65.78%, QoQ +14.43%) and a net profit of 525 million yuan (YoY +135.14%, QoQ +21.13%), both setting quarterly records [5][4]. Product Development - The company is one of the top three global manufacturers of DDR5 memory interface chips, leading the second-generation DDR5 iteration, with shipments exceeding DDR4 in 2024 [6][43]. - Three new computing power products, including PCIe Retimer, MRCD/MDB, and CKD, achieved significant revenue growth, totaling approximately 422 million yuan in 2024, an eightfold increase from 2023 [7][23]. - The MXC chip has entered the first batch of compliant suppliers for CXL 2.0, and the company is shifting R&D resources towards PCIe Switch chips [8][83]. Market Trends - The global memory interface chip market is projected to reach $5.7 billion by 2031, with the company being a key player in the DDR5 generation [38]. - The demand for AI servers is expected to drive the usage of PCIe Retimer chips, with the market for PCIe/USB Retimer projected to grow at a CAGR of 46.8% from 2024 to 2032 [76][79]. R&D and Human Resources - The company had 536 R&D personnel by the end of 2024, with a revenue per employee of 5.07 million yuan [25]. - The company is actively involved in the standardization of memory modules through its participation in JEDEC, contributing to the development of DDR5 standards [36][62].

Investment Rating - The report maintains an "Outperform" rating for the company [5] Core Views - The company focuses on high-speed interconnect chips, with the capacity chips becoming a new growth engine. In 2024, interconnect chips and the server platform accounted for 92% and 8% of revenue, respectively. The company achieved a revenue of 3.639 billion yuan, a year-on-year increase of 59%, and a net profit of 1.412 billion yuan, a year-on-year increase of 213% [1][11][16] - The company is one of the three major DDR5 memory interface chip manufacturers globally, and it has initiated the second-generation iteration of DDR5. The penetration rate of DDR5 continues to rise, with the company’s DDR5 second-generation RCD chip shipments exceeding the first-generation products in 2024 [2][45] - The company’s MXC chip has entered the first batch of compliant suppliers for CXL 2.0, and the company has decided to shift its R&D focus from AI computing chips to PCIe Switch chips [3][12] Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 3.639 billion yuan, with a year-on-year growth of 59%. The net profit reached 1.412 billion yuan, marking a year-on-year increase of 213%. The revenue and net profit for Q1 2025 were 1.222 billion yuan and 525 million yuan, respectively, both setting quarterly records [1][4][16] - The company’s revenue from 2016 to 2024 has a CAGR of 20%, while the net profit has a CAGR of 41% [11][16] Product Development - The company has launched several high-performance capacity chips, including PCIe Retimer, MRCD/MDB, and CKD, which have generated significant revenue growth. In 2024, these new products generated approximately 422 million yuan, an eightfold increase from 2023 [2][24] - The company is actively involved in the development of DDR5 memory interface chips, with the second-generation RCD chip shipments surpassing the first generation in 2024. The third-generation RCD chip is expected to be shipped in Q4 2024 [2][46] Market Position - The company is positioned as a leading provider of interconnect chips and server platforms, with 92% of its revenue derived from interconnect chips in 2024. The gross margin for interconnect chips was 62.7%, slightly above the international comparable company Rambus [24][22] - The global market for memory interface chips is projected to reach 5.7 billion USD by 2031, with the company being one of the three main suppliers in the DDR5 generation [40]