Investment Rating - The investment rating for the company is "Buy" (maintained) [6][9]. Core Views - The company reported H1 2025 revenue of 3.047 billion yuan, a year-on-year increase of 6.07%, and a net profit attributable to shareholders of 692 million yuan, a decrease of 6.18% year-on-year. However, Q2 2025 performance exceeded market expectations with revenue of 2.021 billion yuan, up 16.68% year-on-year, and a net profit of 573 million yuan, up 32.92% year-on-year [6][9]. - The company is experiencing a recovery in demand for specialty products and steady growth in traditional consumer markets, with expectations for accelerated revenue growth in 2025 due to new product launches and market expansions [9]. - The company has maintained high levels of inventory and accounts payable, indicating strong downstream demand and supporting future business growth [9]. Financial Data and Profit Forecast - Total revenue for 2025 is projected to be 7.134 billion yuan, with a year-on-year growth rate of 29.4%. The net profit attributable to shareholders is expected to be 1.685 billion yuan, representing a year-on-year increase of 42.9% [8][11]. - The gross margin for H1 2025 was 55.56%, a decrease of 2.39 percentage points year-on-year, while the net margin was 22.71%, down 3.17 percentage points year-on-year [9]. - The company is expected to see a significant increase in profitability as it continues to expand into new markets and improve its product mix, with projected net profits of 1.685 billion yuan in 2025, 2.347 billion yuan in 2026, and 3.258 billion yuan in 2027 [9][11].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 107.30 [1][5] Core Views - The company reported a revenue of RMB 3.047 billion for H1 2025, representing a year-over-year increase of 6.07%, while the net profit attributable to the parent company was RMB 692 million, down 6.18% year-over-year. The second quarter showed significant improvement with a revenue of RMB 2.021 billion, up 16.68% year-over-year and 97.00% quarter-over-quarter [1] - The company is positioned well in the special integrated circuit and security chip sectors, with a strong recovery in downstream demand and improved order flow, indicating a positive outlook for future performance [1][3] Business Performance Summary - **Special Integrated Circuits**: Revenue for H1 2025 was RMB 1.469 billion, up 18.09% year-over-year, with a gross margin of 71.12%, down 3.44 percentage points [2] - **Smart Security Chips**: Revenue was RMB 1.395 billion, down 5.85% year-over-year, with a gross margin of 44.16%, down 3.60 percentage points due to intense market competition [2] - **Crystal Components**: Revenue reached RMB 151 million, up 35.78% year-over-year, with a gross margin of 11.13%, down 2.61 percentage points [2] - The overall gross margin for H1 2025 was 55.56%, a decrease of 2.32 percentage points year-over-year, but the decline in margin has slowed compared to previous years [2] Product Development and Market Position - The company successfully expanded its product line in special business areas, including high-end AI and visual perception products, which are expected to contribute to future revenue [3] - The eSIM product has entered mass shipment stages, and the company has established a strong position in the global SIM card chip market, with significant orders from leading mobile manufacturers [4] - The automotive safety chip solutions have been adopted by several major Tier 1 suppliers and OEMs, indicating a robust growth trajectory in the automotive electronics sector [4] Profit Forecast and Valuation - The company is projected to achieve net profits of RMB 1.659 billion, RMB 2.102 billion, and RMB 2.594 billion for the years 2025, 2026, and 2027 respectively, with a compound annual growth rate (CAGR) of 25.05% [5][8] - The estimated earnings per share (EPS) for 2025, 2026, and 2027 are RMB 1.95, RMB 2.47, and RMB 3.05 respectively [5][8] - The target price has been adjusted to RMB 107.30, based on a price-to-earnings (PE) ratio of 55 times for 2025 [5]