Core Viewpoint - The report indicates that Bawei Storage is gradually improving its performance in the first half of 2025, driven by rising storage prices and the penetration of AI applications across multiple fields [1][2]. Financial Performance - In the first half of 2025, Bawei Storage reported a revenue of 3.912 billion yuan, representing a year-on-year increase of 13.70%. However, the net profit attributable to shareholders was -226 million yuan, a decline of 179.68% year-on-year [2]. - For Q2 2025, the revenue reached 2.369 billion yuan, showing a year-on-year growth of 38.20% and a quarter-on-quarter increase of 53.50%. The net profit attributable to shareholders was -28.298 million yuan, reflecting a year-on-year decline of 124.44%, but a significant narrowing of losses compared to the previous quarter [2]. Market Trends and Product Development - The recovery in storage prices, along with the delivery of key projects, has led to a gradual improvement in the company's performance. After hitting a low in Q1 2025, storage prices began to stabilize and rise in Q2, contributing to an increase in revenue and gross profit. The gross margin for sales in June reached 18.61%, with a quarter-on-quarter increase of 11.7 percentage points [3]. - Bawei Storage has established a strong market presence among domestic storage manufacturers, with its products being integrated into the supply chains of leading domestic and international clients in mobile phones, PCs, and smart wearables. The company is also experiencing rapid growth in enterprise-level and smart automotive sectors, continuously providing solutions to accelerate new product introductions [4]. AI Integration and Future Projects - The company is advancing its wafer-level packaging project, which is expected to enhance the performance of AI chips while reducing system costs. This project is anticipated to be operational in the second half of 2025, allowing Bawei Storage to offer comprehensive solutions that integrate storage and advanced packaging testing [5]. - The demand for storage solutions is expected to grow significantly due to the increasing requirements for high capacity, speed, and low power consumption in AI applications. Bawei Storage has launched various embedded storage products for AI smartphones and high-performance storage products for AIPC, indicating a strong alignment with market trends [4][5]. Investment Outlook - The earnings per share (EPS) forecasts for Bawei Storage are projected to be 1.03, 1.60, and 2.01 yuan for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings (PE) ratios of 65.4, 42.2, and 33.5. The company is expected to benefit from a new cycle of rising storage prices and the growth of AI-related products, maintaining an "Accumulate-A" rating [5].

Group 1 - The core viewpoint of the article highlights the extensive product layout of Baiwei Storage in the AI era, covering various fields such as mobile phones, PCs, and smart wearable devices [1] - Baiwei Storage offers a range of products including UFS, LPDDR5/5X, DDR5 overclocked memory bars, and PCIe 5.0 SSDs [1] - The company has established partnerships with well-known enterprises like Google and Meta in the smart wearable sector, projecting revenue of 106 million yuan from AI glasses in 2024, with an expected growth of over 500% in 2025 [1] - Baiwei Storage's advanced wafer-level packaging project is expected to commence production in the second half of 2025, covering various advanced packaging forms [1] - In the smart automotive sector, the company has launched automotive-grade eMMC, LPDDR, and NOR Flash products, which are already in mass production with leading domestic car manufacturers [1] - The company is actively promoting the integration of storage and computing, developing various storage-computing integration technology solutions [1] - The first main control chip, SP1800 eMMC 5.1, has already entered mass production, with plans to advance UFS main control chips in key areas [1] - Baiwei Storage emphasizes the future focus of the storage industry on deep applications in cloud, edge, and endpoint, highlighting the importance of localized delivery capabilities and the integration of storage with advanced packaging [1]