Core Insights - Kunyi Investment recently conducted research on a listed company, focusing on its business performance and growth potential in the SPD and EEPROM sectors [1] Group 1: Company Performance - Jucheng Co., Ltd. experienced rapid growth in SPD business sales revenue in the first half of 2025 compared to the same period last year, with significant increases in DDR5 SPD product sales and revenue, while DDR4 SPD products saw a decline [1] - The penetration rate of DDR5 memory modules in the server sector is expected to reach 40%-50% in 2024 and maintain around 95% by 2030 [1] - The company's R&D expenses in the second quarter amounted to 62 million yuan, reflecting a more than 50% quarter-on-quarter increase, primarily for new product development costs [1] Group 2: Market Position and Opportunities - Jucheng Co., Ltd. has become the global leader in open-loop voice coil motor driver chips, with some OIS chips already integrated into the mid-to-high-end smartphone market, representing a market space of approximately 2-3 billion yuan [1] - The automotive-grade EEPROM business saw over 100% year-on-year growth in product sales and revenue, successfully integrating with several leading global automotive electronics Tier 1 suppliers, with some new energy vehicles using more than 40 EEPROMs per vehicle, indicating a market size of about 400-600 million USD [1] - The company's projected sales revenue for the automotive-grade EEPROM business in 2024 is expected to be less than 100 million yuan [1]

Investment Rating - The report maintains a "Buy-A" rating for the company [2][7] Core Views - The company has shown significant growth in revenue and net profit, with a 46.17% year-on-year increase in revenue to 1.028 billion yuan and a 189.23% increase in net profit to 290 million yuan for the year 2024 [3][4] - The growth is attributed to the rapid increase in shipments of SPD products and automotive-grade EEPROM, driven by strong downstream demand [4][5] - The company's gross margin improved to 54.81%, up 8.22 percentage points year-on-year, while the net margin reached 26.84%, an increase of 15.08 percentage points [5] Financial Performance - For 2024, the company achieved a revenue of 1.028 billion yuan, a 46.17% increase from the previous year, and a net profit of 290 million yuan, up 189.23% [3][4] - The fourth quarter of 2024 saw a revenue of 259 million yuan, a 28.45% year-on-year increase, and a net profit of 79 million yuan, reflecting a 339.79% increase [3][4] - The company’s gross margin for 2024 was 54.81%, and the net margin was 26.84%, indicating improved profitability [5] Product Development - The company is expanding its product lines, focusing on high-value markets such as SPD products for DDR5 memory modules, automotive-grade EEPROM, and NOR Flash for various applications [6] - The successful introduction of automotive-grade EEPROM to leading Tier 1 suppliers has significantly boosted sales [4][6] Future Projections - The company is projected to achieve earnings per share (EPS) of 2.74 yuan in 2025, 3.83 yuan in 2026, and 4.81 yuan in 2027, with corresponding price-to-earnings (P/E) ratios of 26.5, 19.0, and 15.1 [7][9] - Revenue is expected to grow to 1.497 billion yuan in 2025, 2.010 billion yuan in 2026, and 2.476 billion yuan in 2027, reflecting a strong growth trajectory [9][13]