Summary of Will Semi (OmniVision) Conference Call Company Overview - **Company Name**: Will Semi (re-branded to OmniVision) - **Stock Code**: 603501.SS Key Industry Insights - **Industry Focus**: Camera Integrated Circuits (CIS) for smartphones and automotive applications - **Market Trends**: Increasing adoption of cameras in vehicles and flagship smartphone launches in the second half of the year Core Financial Projections - **2Q25 Revenue Growth**: Expected to grow by +18% YoY to Rmb7.7 billion, continuing the growth trend from 1Q (+15% YoY) [1][3] - **Net Income Growth**: Projected net income growth of +33% YoY to Rmb1.1 billion in 2Q25 [1][3] - **Gross Margin**: Anticipated to be 30.6% in 2Q25, slightly down from 31.0% in 1Q25 due to lower contributions from smartphone CIS during slow seasons [3] Product Developments - **Smartphone CIS**: - New product OV50X with 50MPx sensor to start mass production in 3Q25, targeting flagship Android models [2] - Smartphone CIS expected to contribute 38% of revenues in 2024 [2] - **Automotive CIS**: - Expected to grow due to increased camera adoption in vehicles (from 3-4 cameras to 7-10 cameras per vehicle) [2] - Projected vehicle camera shipments in China to reach 126 million in 2025, growing at a +22% CAGR to 343 million by 2030 [2] Earnings Revisions - **2025-2027 Estimates**: Full-year estimates for revenue and net income remain unchanged, with adjustments made for quarterly seasonality [8] Valuation and Price Target - **12-Month Price Target**: Rmb175.3, based on a 31x 2026E P/E, which is within the company's historical trading range [13][15] - **Current Price**: Rmb125.71, indicating a potential upside of 39.4% [15] Risks to Consider - **Product Expansion**: Risks include slower new product expansion and product mix improvement in smartphone CIS [14] - **Market Demand**: Weaker-than-expected demand in the China smartphone market could impact growth [14] - **Trade Tensions**: Potential impacts from ongoing trade tensions may pose risks to operations [14] Conclusion - **Investment Recommendation**: Maintain Buy rating based on strong growth prospects in both smartphone and automotive CIS segments, supported by new product launches and market trends [1][2][15]

Group 1 - The core viewpoint is that Haowei Group, formerly known as Weir Shares, has officially submitted its listing application to the Hong Kong Stock Exchange, marking a significant step in its global expansion strategy [2][6]. - Haowei Group is recognized as one of the top ten Fabless semiconductor companies globally, with an annual shipment of 11.2 billion units and over 2,300 active global customers, securing its position as a leading player in the image sensor market [4][6]. - The company has achieved a market capitalization of 155.66 billion yuan, driven by the strategic leadership of Yu Renrong, who is regarded as China's chip tycoon [4][6]. Group 2 - Haowei Group operates three main product lines: CIS (Camera Image Sensors), display solutions, and analog solutions, targeting high-growth markets [8]. - In the smartphone sector, Haowei holds a market share of 10.5% in CIS chips, while dominating the automotive CIS market with a 32.9% share, showcasing its competitive edge [9]. - The company has a robust patent portfolio with 4,865 authorized patents and employs 2,387 R&D personnel, establishing a strong technological barrier [9]. Group 3 - Financially, Haowei Group has demonstrated significant growth, with revenue increasing from 20.04 billion yuan in 2022 to 25.71 billion yuan in 2024, and gross profit rising from 4.74 billion yuan to 7.24 billion yuan during the same period [10]. - In Q1 2025, the company reported a year-on-year revenue growth of 14.68% and a net profit surge of 55.25%, indicating strong financial performance [10]. - The company's gross margin improved from 21.76% to 31.03%, while net profit margin increased from 2.59% to 13.31%, reflecting enhanced profitability [10]. Group 4 - The listing on the Hong Kong Stock Exchange is a crucial move for Haowei Group's internationalization strategy, aimed at expanding financing channels and accelerating capacity expansion and technological development [13]. - The company is transitioning from a single product supplier to a comprehensive solution provider, focusing on cutting-edge fields such as edge AI and MR [13]. - With the global trend of domestic chip replacement, Haowei Group is positioned to leverage capital to gain a strategic advantage in the global semiconductor competition [13].

Core Viewpoint - The company reported strong financial performance for 2024 and Q1 2025, indicating significant growth in revenue and net profit, driven by its semiconductor design and automotive businesses [3][4]. Financial Performance - In 2024, the company achieved revenue of 25.731 billion yuan, a year-on-year increase of 22.41%, and a net profit attributable to shareholders of 3.323 billion yuan, up 498.11% [3]. - For Q1 2025, the company reported revenue of 6.472 billion yuan, a 14.68% increase, and a net profit of 866 million yuan, up 55.25% [3]. Business Segments Semiconductor Design - The image sensor solutions segment generated revenue of 19.190 billion yuan in 2024, a 23.52% increase, accounting for 74.76% of total revenue [4]. - The display solutions segment saw a revenue decline of 17.77% to 1.028 billion yuan, representing 4.01% of total revenue [4]. - The analog solutions segment achieved revenue of 1.422 billion yuan, a 23.18% increase, making up 5.54% of total revenue [4]. Automotive Business - Revenue from the automotive market for image sensors reached approximately 5.905 billion yuan in 2024, a year-on-year increase of 29.85%, with a growing market share [5]. - The demand for in-car camera systems is increasing due to the acceleration of advanced driver-assistance systems (ADAS) and the penetration into mid-to-low-end models [5]. - The company has a rich product matrix in the automotive CIS field, with significant growth expected in automotive analog ICs, projected to increase by 37.03% year-on-year in 2024 [5]. Mobile Business - The mobile CIS segment generated revenue of 9.802 billion yuan in 2024, a 26.01% increase, benefiting from a mild recovery in the smartphone market [6]. - The company’s high-end strategy is showing results, with products like OV50H gaining market share against foreign competitors [6][7]. Emerging Businesses - The company is strategically investing in emerging markets such as smart glasses, robotics, and action cameras, leveraging advancements in AI technology [8]. - Collaborations with major clients are expected to drive growth in the wearable business, particularly with the upcoming release of AI glasses in 2025 [8].