Investment Rating - The report assigns a "Buy" rating for the company with a target price of 69.02 CNY, based on a current price of 56.09 CNY [5]. Core Insights - The company is a leading player in the data storage controller chip and AIoT signal processing chip sectors, benefiting from high barriers to entry and a robust growth trajectory driven by high-margin products and recovering downstream demand [1][4]. - The company achieved a revenue of 1.174 billion CNY in 2024, representing a year-over-year growth of 13.55%, and a net profit of 118 million CNY, reflecting a significant increase of 126% [1][24]. - The AIoT chip business saw a remarkable revenue growth of 73.61% in 2024, reaching 251 million CNY, indicating strong demand in emerging applications [3][4]. Financial Data and Valuation - The company is expected to generate revenues of 1.353 billion CNY in 2025, 1.671 billion CNY in 2026, and 2.066 billion CNY in 2027, with net profits projected at 124 million CNY, 171 million CNY, and 238 million CNY respectively [4]. - The company maintains a high R&D expense ratio of 36%-38%, with R&D expenditures reaching 425 million CNY in 2024 [3][34]. - The gross profit margin improved to 47.47% in 2024, up from 35.43% in 2019, showcasing enhanced profitability [33]. Industry Analysis - The global storage chip market is projected to grow significantly, with an estimated size of 129.77 billion USD in 2024, driven by demand from AI, 5G, and automotive sectors [43]. - The company holds a 25% market share in the global independent third-party SSD controller chip market, with a shipment volume of 49 million units in 2024 [2][55]. - The AIoT industry is expanding rapidly, with the number of connected IoT devices expected to reach 25 billion by 2025, creating substantial demand for AIoT chips [60][62].

Core Viewpoint - Lianyun Technology (688449.SH) has successfully listed on the Sci-Tech Innovation Board and reported a revenue growth of 11.19% year-on-year to 241 million yuan in Q1 2024, with a significant increase in R&D investment to 60.36%, raising concerns about its short-term profitability [1][2][4]. R&D Investment - The company's R&D expense ratio has historically ranged from 26.74% to 44.10%, with a Q1 2024 figure of 43.35%, while the 60.36% in Q1 2025 marks a significant deviation from this trend [2][7]. - The increase in R&D spending is attributed to substantial costs associated with product tape-out, with a year-on-year growth of 54.81% in Q1 2024 [2][4]. Financial Performance - Lianyun Technology's revenue from data storage control chips grew by 25.42% year-on-year to 920 million yuan in 2024, driven by successful market penetration in consumer electronics, enterprise, and industrial sectors [5][6]. - The AIoT business also showed strong growth, with revenue reaching 251 million yuan, reflecting a 73.61% year-on-year increase [6]. - The company maintains a low debt ratio of 18.05% compared to industry peers, enhancing its resilience against market fluctuations [9][10]. Technology and Market Development - The company achieved significant technological milestones in 2024, including the successful mass production of its first PCIe 5.0 control chip and advancements in UFS 3.1 control chips [5][6]. - Lianyun Technology's strategy focuses on deepening existing customer relationships while expanding into new markets, particularly in the IoT sector [6][10]. Strategic Balance - The company demonstrates a strategic balance between high R&D investment and financial health, positioning itself to withstand industry volatility while fostering sustainable growth [10].