Core Viewpoint - Guangdong Narui Radar Technology Co., Ltd. plans to acquire 100% equity of Tianjin Sigma Microelectronics Technology Co., Ltd. for a transaction price of 370 million yuan, aiming to enhance radar-specific chip design capabilities and establish a self-controlled chip technology system [1][2] Transaction Background - Narui Radar currently relies on purchasing general-purpose chips for phased array radar, with chip costs accounting for 23%-29% of the total machine cost. As the next-generation digital phased array radar technology evolves, the chip cost proportion is expected to rise to 30%-50% [2] - The target company possesses mature technology reserves in optoelectronic sensors and MCU chips, with its ADC/DAC intellectual property matrix aligning with radar chip demands [2] Synergy Effects - Post-acquisition, self-developed chips are expected to enhance product competitiveness in terms of cost and performance. For instance, the price of MCU chips is projected to drop over 50% from 15 yuan to 3 yuan per unit [3] - Key performance parameters of the next-generation radar using self-developed chips are anticipated to improve significantly, including a 46.5% increase in peak power and an 8.6% reduction in system noise figure [3] R&D Progress - The target company has delivered MCU chip samples for testing, with plans for small batch verification within six months. Projects for ADC and DAC chips are underway, with a total investment of 140 million yuan planned for radar-specific chip R&D [4] - The core team of the target company has over 20 years of chip design experience, facilitating a feasible collaboration with Narui Radar's technical team [4] Valuation and Integration - The transaction price of 370 million yuan is significantly lower than the historical valuation of 1.05 billion yuan, reflecting changes in the semiconductor investment environment [5] - Management shareholders will lock in 78% of their shares for 36 months, with performance commitments set for 2025-2027 [5] Industry Benchmarking - The acquisition positions Narui Radar to transition from purchasing general-purpose chips to custom chip design, addressing gaps in radar-specific chip capabilities and laying the groundwork for expansion into new areas such as 5G communication and satellite radar [6] Independent Financial Advisor Opinion - CITIC Securities believes the transaction will help the listed company reduce core component procurement costs and acquire key technologies, with the transaction price deemed fair [7]

Group 1: Company Announcement - Chengdu Huayi announced the successful release of its HWD12B40GA4 ADC chip, which features 4 channels, 12-bit resolution, and a sampling rate of 40GSPS, marking a significant technological breakthrough for the company [1][2] - The new chip fills a gap in both domestic and international markets, achieving international leading technology levels and consolidating the company's position in the high-speed, high-precision ADC field [2][3] - The chip supports configurable sampling rates of 24-40GSPS in 4-channel mode and 48-80GSPS in dual-channel mode, with an input analog bandwidth of up to 19GHz and a low noise spectral density of -152dBFs/Hz [2][3] Group 2: Industry Context - The special integrated circuit industry is reportedly at a turning point, with several research institutions indicating that the industry has bottomed out and is expected to see upward trends in demand, particularly due to low-orbit satellite factors [1][5][6] - The industry maintains relatively high gross margins, and with rapid revenue growth, net profits are anticipated to be released quickly [6] - The domestic ADC chip market is projected to exceed 15 billion yuan in 2023, with significant replacement opportunities available as the market is currently dominated by foreign companies [7]

Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [3][4]. Core Insights - The company is a leading domestic player in the special chip market, focusing on both analog and digital products, with rapid progress in new product development [3][14]. - The recovery in downstream demand for special and civilian products is expected to continue, with significant opportunities for domestic substitution in the FPGA and ADC/DAC markets [1][2]. Summary by Sections Company Overview - Chengdu Huami is a leading enterprise in high-end integrated circuit design in China, focusing on the research and industrialization of analog and digital chips, covering core categories such as ADC/DAC, intelligent SoC, and FPGA [10]. - The company is actively pushing for high-performance products in the analog chip sector, particularly in high-speed and high-precision data converters and power management [10]. Financial Forecast - Revenue projections for 2025-2027 are estimated at 1,002 million, 1,170 million, and 1,420 million yuan, respectively, with net profit estimates of 360 million, 421 million, and 530 million yuan [3][11]. - The expected EPS for the same period is 0.57, 0.66, and 0.83 yuan [3][11]. Market Position and Growth Potential - The domestic FPGA chip market is projected to reach approximately 29.7 billion yuan in 2023, with significant room for increasing domestic market share [1]. - The ADC chip market in China is expected to exceed 15 billion yuan in 2023, indicating a broad replacement space in the high-end market currently dominated by foreign players [1][2]. Product Development - The company has introduced a series of high-speed and high-precision ADC products, achieving mass production and actively developing AI chips for edge computing with significant processing capabilities [2][10]. - The product lineup includes various types of chips such as logic chips, storage chips, microcontrollers, and power management chips, indicating a comprehensive approach to market needs [2][10]. Valuation Metrics - The projected PE ratios for 2025-2027 are 83.17, 71.10, and 56.51, respectively, based on the closing price of 47.04 yuan per share on August 22, 2025 [3][14]. - The company is positioned favorably compared to peers, with a higher PE ratio reflecting its growth potential in the special chip market [14].