Group 1 - The implementation of the "Private Economy Promotion Law" on May 20 is a significant boost for private enterprises in China, marking a milestone in the development of the private economy [2] - The law is expected to instill confidence in private entrepreneurs, encouraging them to engage in innovation and entrepreneurship [2] - As a representative of Jiangsu's private enterprises, the company Zhuoshengwei (300782) participated in a face-to-face event organized by the National Development and Reform Commission [2] Group 2 - Zhuoshengwei is focused on technological innovation in the RF chip sector, aiming to provide high-performance and differentiated products and services [2] - The company has reported smooth progress in ramping up its 12-inch production line capacity, with cost pressures easing and product performance advantages becoming evident [3] - The L-PAMiD product, developed by the company, is the first domestically produced supply chain product in the industry, entering the verification and small batch delivery phase, with expectations for significant growth in the second half of the year [3] Group 3 - The second-generation SOI process development is progressing well, with WiFi7 modules already achieving scale shipments in the smartphone sector [3] - The company is committed to building a self-controlled RF front-end chip industry chain and accelerating the construction of an industrial ecosystem under the support of the new law [3] - The legal and policy support from the "Private Economy Promotion Law" provides the company with more confidence to deepen its core technology development [3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 93.4 RMB [7][4]. Core Views - The company reported a revenue of 756 million RMB in Q1 2025, a year-over-year decline of 36.47% and a quarter-over-quarter decline of 32.49%. The net loss attributable to shareholders was 47 million RMB, a year-over-year decline of 123.57% and a quarter-over-quarter decline of 97.62% [1][2]. - The decline in revenue is attributed to weak demand in the mobile phone market and a high base effect from the previous year. The depreciation from the ramp-up of the 12-inch production line has significantly impacted the gross margin, leading to losses for two consecutive quarters [1][2]. - The company is expected to see a gradual increase in revenue throughout 2025, particularly in the second half of the year, as new products like L-PAMID begin to contribute to sales [1][3]. Summary by Sections Q1 2025 Review - The gross margin decreased to 31.0%, down 11.8 percentage points year-over-year and 5.4 percentage points quarter-over-quarter, primarily due to production line depreciation and intense market price competition [2]. - R&D expenses decreased to 178 million RMB, a year-over-year decline of 33.9% and a quarter-over-quarter decline of 27.3% [2]. - The company's inventory stood at 2.517 billion RMB, remaining stable compared to the end of 2024, indicating a healthy inventory level [2]. 2025 Outlook - The company's performance is expected to show a trend of lower results in the first half and higher results in the second half of 2025, with an anticipated double-digit revenue growth for the year [3]. - Key products such as the first-generation self-produced RF switches and low-noise amplifiers have entered mass production, and the second-generation technology is under development, which will help strengthen market competitiveness [3]. - The WiFi7 module products are progressing well in client mass production, and revenue from the first-generation L-PAMID products is expected to increase in the second half of 2025 [3]. Investment Recommendations - The report maintains profit forecasts for 2025-2027 at 436 million RMB, 913 million RMB, and 1.391 billion RMB respectively, with a target price based on a 10x price-to-sales ratio for 2025 [4][6].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 93.4 RMB [7]. Core Views - The company achieved a revenue of 4.487 billion RMB in 2024, a year-on-year increase of 2.5%, but the net profit attributable to shareholders decreased by 64.2% to 402 million RMB due to increased module revenue share, production line depreciation, and market competition [1][2]. - The company is expected to benefit from an increase in market share for filter modules and the ramp-up of LPAMiD products in 2025, although gross margins may continue to be pressured by production line depreciation [1][3]. Summary by Sections Financial Performance - In 2024, the company's revenue was 4.487 billion RMB, slightly below the expected 4.564 billion RMB, with a gross margin of 39.49%, down 6.96 percentage points year-on-year [1][2]. - The fourth quarter of 2024 saw a revenue of 1.119 billion RMB, a year-on-year decrease of 14.2% and a quarter-on-quarter increase of 3.4%, with a net loss of 24 million RMB [1][2]. Market Outlook - For 2025, the company is projected to see revenue growth driven by increased market share in filter modules and the mass production of LPAMiD products, with the global Android smartphone shipment expected to grow by 2.5% [3][4]. - The company’s self-developed RF switches and low-noise amplifiers have entered mass production, enhancing its competitive advantage [3]. Investment Recommendations - The target price is set at 93.4 RMB, reflecting a 10x price-to-sales ratio based on 2025 estimates, with expected revenues of 4.995 billion RMB in 2025, 5.851 billion RMB in 2026, and 6.739 billion RMB in 2027 [4][6]. - The report indicates that the company remains a leader in the domestic RF industry, with a solid foundation in receiving end products and a gradually improving layout in the transmitting end [4].