Core Viewpoint - Hengxuan Technology is a leading company in the global smart audio SoC chip sector, with significant investment value due to its high technical barriers and comprehensive industry chain coverage [1] Group 1: Business Performance - In Q3 2025, Hengxuan Technology reported revenue of 2.933 billion yuan, ranking 16th among 48 companies in the industry, surpassing the industry average of 2.912 billion yuan and the median of 1.156 billion yuan, but significantly lower than the top two competitors, OmniVision and Jiangbo Long, with revenues of 21.783 billion yuan and 16.734 billion yuan respectively [2] - The net profit for the same period was 502 million yuan, ranking 11th in the industry, above the average of 348 million yuan and the median of 107 million yuan, but still trailing behind the leading companies, which reported net profits of 3.199 billion yuan and 2.841 billion yuan [2] Group 2: Financial Ratios - As of Q3 2025, Hengxuan Technology's debt-to-asset ratio was 7.59%, down from 8.19% year-on-year and significantly lower than the industry average of 24.46%, indicating strong solvency [3] - The gross profit margin for the same period was 38.51%, an increase from 33.76% year-on-year, and higher than the industry average of 36.52%, reflecting robust profitability [3] Group 3: Executive Compensation - The chairman, Liang Zhang, received a salary of 2.6706 million yuan in 2024, an increase of 214,200 yuan from 2023 [4] - The general manager, Zhao Guoguang, earned 2.0704 million yuan in 2024, up by 490,700 yuan from the previous year [4] Group 4: Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 65.90% to 20,600, while the average number of circulating A-shares held per shareholder decreased by 15.46% to 8,165.98 [5] Group 5: Future Projections - Guotou Securities forecasts that Hengxuan Technology's revenue will reach 4.657 billion yuan, 5.965 billion yuan, and 7.635 billion yuan in 2025, 2026, and 2027 respectively, with net profits of 803 million yuan, 1.101 billion yuan, and 1.492 billion yuan [6] - Caitong Securities also projects revenues of 4.559 billion yuan, 5.876 billion yuan, and 7.220 billion yuan for the same years, with corresponding net profits of 840 million yuan, 1.181 billion yuan, and 1.472 billion yuan [6]

Core Insights - Hengxuan Technology (Shanghai) Co., Ltd. reported a significant increase in revenue and net profit for the first half of 2025, with revenue reaching 1.938 billion yuan, a year-on-year growth of 26.58%, and net profit attributable to shareholders at 305 million yuan, up 106.45% [1][2] Financial Performance - The company achieved a gross margin of 39.3%, an increase of 6.1 percentage points year-on-year, which contributed to the rapid growth in net profit [1] - The non-recurring net profit was 284 million yuan, reflecting a year-on-year increase of 153.37% [1] Market Position and Product Development - Hengxuan Technology focuses on the design and development of low-power wireless computing SoCs, with a strong emphasis on the smart wearable and smart home markets, leading to an increase in market share [1] - The new generation smart wearable chip, BES2800, has been widely adopted in customer products such as smartwatches and smart glasses, reinforcing the company's technological leadership in the industry [1] Customer Base and Product Expansion - The company successfully onboarded new domestic and international clients in the smartwatch market, including Xiaotianzi and Songtuo, leading to rapid growth in chip shipments for smartwatches [1] - Beyond Bluetooth headsets and smartwatches, the company's chips are gradually extending into low-power wireless applications such as smart glasses and wireless microphones [1] Research and Development - Hengxuan Technology maintained a high level of R&D investment, with expenses amounting to 395 million yuan, a year-on-year increase of 22.77% [2] - As of the end of the reporting period, the total number of R&D personnel reached 621, accounting for 86.25% of the workforce [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 447.20 CNY [5][10] Core Insights - The company reported a 50% year-on-year revenue growth in 2024, reaching 32.6 billion CNY, and a 272% increase in net profit attributable to shareholders, amounting to 460 million CNY. In Q1 2025, revenue surged to 9.9 billion CNY, reflecting a 523% year-on-year growth, while net profit soared to 1.91 billion CNY, up 590% [1][4][9] Financial Performance Summary - **Revenue Forecast**: The company is projected to achieve revenues of 47.12 billion CNY in 2025, 60.44 billion CNY in 2026, and 77.55 billion CNY in 2027, with year-on-year growth rates of 44%, 28%, and 28% respectively [4][10] - **Net Profit**: Forecasted net profit for 2025 is 837 million CNY, increasing to 1.25 billion CNY in 2026 and 1.83 billion CNY in 2027, with growth rates of 82%, 49%, and 47% respectively [4][10] - **Earnings Per Share (EPS)**: Expected EPS is 6.97 CNY for 2025, 10.40 CNY for 2026, and 15.23 CNY for 2027 [4][10] - **Profit Margins**: Gross margin is expected to improve from 34.7% in 2024 to 39.9% in 2027, while net margin is projected to rise from 14.1% to 23.6% over the same period [4][10] Strategic Developments - The company is enhancing its strategic positioning in the smart wearable market, with the new generation of wearable chips, BES2800, entering mass production in 2024. This chip utilizes 6nm FinFET technology and integrates multiple functionalities, significantly reducing power consumption [9] - The revenue from smart wearable chips is expected to reach 1.05 billion CNY in 2024, marking a 116% increase and contributing approximately 32% to total revenue [9] R&D Investment - The company plans to invest 617 million CNY in R&D in 2024, a 12% increase from the previous year, focusing on low-power wireless computing platforms and advanced technologies [9]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 447.20 CNY [5][11] Core Insights - The company reported a 50% year-on-year increase in revenue for 2024, reaching 3.26 billion CNY, and a 272% increase in net profit attributable to shareholders, amounting to 460 million CNY. In Q1 2025, revenue reached 990 million CNY, a 52.3% year-on-year growth, with net profit at 191 million CNY, reflecting a 590% increase [1][2] - The company is transitioning towards a platform-based chip company, with significant growth in its smart wearable chip segment, which generated 1.05 billion CNY in revenue in 2024, a 116% increase, contributing approximately 32% to total revenue [10] - The new generation of smart wearable chips, BES2800, has entered mass production, utilizing 6nm FinFET technology, which significantly reduces power consumption and supports various applications in smartwatches, smart glasses, and audio devices [10] Financial Performance Summary - Revenue projections for 2025-2027 are 4.71 billion CNY, 6.04 billion CNY, and 7.76 billion CNY, respectively, with year-on-year growth rates of 44%, 28%, and 28% [4] - The company's net profit attributable to shareholders is expected to reach 837 million CNY in 2025, with a growth rate of 82%, and further increase to 1.83 billion CNY by 2027 [4] - The earnings per share (EPS) forecast for 2025-2027 is 6.97 CNY, 10.40 CNY, and 15.23 CNY, respectively [2][11] Research and Development - The company plans to invest 617 million CNY in R&D in 2024, a 12% increase from the previous year, focusing on low-power wireless computing platforms and audio processing technologies [10]

Investment Rating - The report maintains a "Buy" rating for the company [10][16]. Core Insights - The company achieved a record high revenue of 3.263 billion yuan in 2024, representing a year-on-year growth of 49.94%, and a net profit of 460 million yuan, up 272.47% year-on-year [4][5]. - In Q1 2025, the company reported revenue of 999.5 million yuan, a 52.25% increase year-on-year, and a net profit of 191 million yuan, reflecting a staggering growth of 590.22% year-on-year [4][5]. - The growth in revenue and profit is attributed to the expanding smart wearable market, increased sales of smart watch chips, and improved average selling prices due to product iterations [5][6]. Revenue and Profit Forecast - The company is projected to achieve revenues of 4.856 billion yuan, 6.196 billion yuan, and 7.765 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding net profits of 780.91 million yuan, 1.07561 billion yuan, and 1.47177 billion yuan [10][12]. Financial Metrics - The company’s PE ratios for 2025, 2026, and 2027 are expected to be 67, 49, and 36, respectively [10][12]. - The gross margin for Q1 2025 reached 38.47%, an increase of 5.54 percentage points year-on-year [5][6]. Market Position and Product Development - The company has successfully expanded its smart watch and band chip business, with revenue contribution rising from approximately 22% in 2023 to around 32% in 2024 [6]. - The new generation chip, BES2800, is expected to be widely applied in TWS earphones, smart watches, and smart glasses in 2025, utilizing advanced 6nm FinFET technology [6][9].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][17]. Core Views - The company achieved a revenue of 3.263 billion yuan in 2024, representing a year-on-year increase of 49.94%, and a net profit of 460 million yuan, up 272.47% year-on-year [5]. - In Q1 2025, the company reported a revenue of 999.5 million yuan, a year-on-year increase of 52.25%, and a net profit of 191 million yuan, up 590.22% year-on-year [5]. - The new generation 6nm chip, BES2800, has been mass-produced and is expected to drive continuous high growth for the company [9]. Summary by Sections Financial Performance - In 2024, the company achieved a gross margin of 34.71%, which improved by 0.51% year-on-year, while the gross margin for Q1 2025 was 38.47%, an increase of 5.54% year-on-year [8]. - The net profit margin for 2024 was 14.11%, up 8.43% year-on-year, and for Q1 2025, it was 19.16%, an increase of 14.93% year-on-year [8]. Market Position - The company has seen a significant increase in its market share in the smart wearable market, with revenue from smart watch and band chips reaching 1.045 billion yuan in 2024, a year-on-year increase of 116% [8]. - The product structure is diversifying, with Bluetooth audio chips accounting for approximately 62% and smart watch/band chips about 32% of total revenue in 2024 [8]. Future Outlook - The company is expected to achieve revenues of 4.8 billion yuan, 6.19 billion yuan, and 7.594 billion yuan for the years 2025, 2026, and 2027, respectively [10]. - The projected net profits for the same years are 874 million yuan, 1.182 billion yuan, and 1.541 billion yuan, respectively [10].