Core Viewpoint - 瑞声科技 reported a revenue of 13.3 billion yuan for 1H25, reflecting an 18% year-over-year increase, with a net profit of 880 million yuan, up 63% year-over-year [1][2] Group 1: Financial Performance - The company achieved a revenue of 35.2 billion yuan in the acoustic segment, a 2% year-over-year increase, with a gross margin of 27.2%, down 2.7 percentage points [1] - The optical segment generated a revenue of 26.5 billion yuan, a 20% year-over-year increase, with a gross margin of 10.2%, up 5.5 percentage points [1] - The motor and precision components segment reported a revenue of 46.3 billion yuan, a 27% year-over-year increase, with a gross margin of 22.9%, remaining stable [1] Group 2: Future Outlook - The company is expected to leverage opportunities in the automotive, XR glasses, and robotics sectors, potentially creating new growth drivers [2] - In the automotive sector, partnerships and acquisitions are anticipated to enhance the company's competitive edge, with significant revenue and market share growth expected in the next 2-3 years [2] - For XR glasses, the company has made breakthroughs with major clients, leading to anticipated rapid revenue growth from this segment [2] - The robotics segment is expected to see product layout advancements, particularly in high-value areas, with potential for quick scaling in customer adoption [2] Group 3: Valuation and Ratings - The net profit forecasts for 2025, 2026, and 2027 have been adjusted downwards by 1%, 5%, and 4% to 2.28 billion, 2.65 billion, and 2.92 billion yuan respectively [1][2] - The target price has been revised to 60.30 HKD, maintaining a "buy" rating, with a target PE of 25.0x for 2026 [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 60.30 [4][6][14] Core Views - The company reported a revenue of HKD 13.3 billion for 1H25, representing an 18% year-over-year increase, with a gross margin of 20.7%, down 0.8 percentage points year-over-year [1][2] - The net profit attributable to shareholders for 1H25 was HKD 880 million, a 63% increase year-over-year [1] - The report indicates a downward adjustment in net profit forecasts for 2025, 2026, and 2027 by 1%, 5%, and 4% respectively, due to lower-than-expected gross margin improvements in the MEMS microphone business [1][4] Revenue and Profitability - The revenue breakdown for 1H25 includes: - Acoustic segment: HKD 3.52 billion, up 2% year-over-year, with a gross margin of 27.2%, down 2.7 percentage points [2] - Optical segment: HKD 2.65 billion, up 20% year-over-year, with a gross margin of 10.2%, up 5.5 percentage points [2] - Motor and precision components: HKD 4.63 billion, up 27% year-over-year, with a gross margin of 22.9%, roughly flat year-over-year [2] Future Growth Opportunities - The company is expected to benefit from growth in new intelligent terminals such as automotive, XR glasses, and robotics, with significant breakthroughs anticipated in the next 2-3 years [3][4] - Collaborations with PSS and acquisitions in the automotive sector are expected to enhance the company's competitive position in vehicle acoustics [3] - The report highlights the potential for rapid revenue growth from XR customers due to successful product placements [3] Valuation Metrics - The target price of HKD 60.30 corresponds to a 2026 target PE of 25.0x, which is a premium compared to the average of comparable companies at 20.6x [4][14] - The report suggests that the current valuation of 18.0x for the 2026 forecast PE is attractive [14]