Core Insights - The company aims to achieve sales exceeding 500 billion yen by the fiscal year 2028, with an operating profit margin of over 20% and a return on equity (ROE) of over 9% [3][4][6] Group 1: Financial Goals - The company has set a target to achieve net sales exceeding 215 billion yen in its LSI business, with an operating profit margin of over 23% [7] - The goal for the power device business is to achieve net sales exceeding 175 billion yen, with an operating profit margin of over 14% [11] - The company aims for sales exceeding 110 billion yen in general equipment and other businesses, with an operating profit margin of over 22% by the fiscal year 2028 [16] Group 2: Strategic Focus Areas - The company plans to focus on power and analog semiconductors, particularly in the automotive sector, which is expected to account for 55% of total sales, approximately 275 billion yen [4] - There will be an increased investment in optical devices for sensing applications, aiming to cultivate this area as a next-generation growth pillar [4] - The company intends to enhance its competitive edge through proprietary technologies, including the development of Chiplet architecture and AI technologies [10] Group 3: Operational Improvements - To achieve the target of 100 billion yen in operating profit, the company will optimize its business portfolio, reduce manufacturing costs, and adjust pricing strategies [6] - The company is focusing on improving the production of SiC substrates and aims to transition to 8-inch wafers for better yield and quality [14] - The company plans to enhance the sales of high-value SiC power modules and expects to triple its customer base in Europe and the Americas by the fiscal year 2028 [13]

Investment Rating - The investment rating for the company is "Accumulate" [9] Core Views - The company is strategically adjusting its product integration business to focus on high-margin, high-barrier semiconductor operations. The semiconductor business has shown steady growth due to industry recovery, while the product integration business has faced challenges due to being placed on an entity list [1][3] - In the first half of 2025, the company reported a revenue of 25.341 billion yuan, a year-on-year decrease of 24.56%, but a net profit attributable to the parent company of 0.474 billion yuan, a year-on-year increase of 237.36% [1] - The semiconductor business achieved a revenue of 7.825 billion yuan, a year-on-year increase of 11.23%, with a gross margin of 37.89% and a net profit of 1.261 billion yuan, a year-on-year increase of 17.05% [1][2] Summary by Sections Semiconductor Business Performance - The semiconductor business is experiencing growth driven by strong sales in power and analog semiconductors, with significant demand from the automotive sector, AI infrastructure, and industrial applications. The revenue from the automotive sector accounted for 59.86% of the semiconductor business in the first half of 2025 [2][4] - The company is focusing on R&D and innovation to enhance its product offerings, with a significant portion of its semiconductor products meeting automotive-grade standards [2][4] Product Integration Business Challenges - The product integration business has faced significant revenue declines due to the impact of being placed on an entity list, leading to a net loss of 0.685 billion yuan in the first half of 2025 [1][3] - The company has decided to divest its product integration business to concentrate resources on strengthening its semiconductor business, which is expected to enhance its competitive advantage in the semiconductor industry [3][6] Financial Projections - The company forecasts revenues of 35.636 billion yuan, 18.331 billion yuan, and 20.447 billion yuan for 2025, 2026, and 2027 respectively, with net profits of 1.909 billion yuan, 2.588 billion yuan, and 3.114 billion yuan for the same years [6][7] - The company is expected to maintain stable profitability in the future as it focuses on the semiconductor sector [6]