Core Viewpoint - The company experienced a significant decline in revenue and profitability in the first half of 2025, with expectations for a recovery in gross margin due to cost reduction efforts and improved production efficiency in the latter half of 2024 [1][2][3]. Financial Performance - In the first half of 2025, the company reported revenue of 1.704 billion yuan, a year-over-year decrease of 25.42%, and a net loss attributable to shareholders of 147 million yuan, down 141.59% year-over-year [1]. - The second quarter of 2025 saw revenue of 948 million yuan, a year-over-year decline of 13.43% but a quarter-over-quarter increase of 25.43% [1]. - Gross margin decreased by 13.4 percentage points to 28.75% in the first half of 2025, with a gross margin of 26.95% in Q2 2025, reflecting a year-over-year decline of 14.4 percentage points [1]. Product Line Performance - Revenue from the RF discrete devices segment was 899 million yuan, a year-over-year decrease of 29.01%, accounting for 53% of total revenue, with a gross margin decline of 15.0 percentage points to 28.25% [1]. - Revenue from the RF module segment was 756 million yuan, down 21.79% year-over-year, representing 44% of total revenue, with a gross margin decrease of 12.0 percentage points to 28.74% [1]. Future Outlook - The company anticipates a stabilization and recovery of gross margins as production efficiency improves and cost reduction milestones are achieved [2]. - The L-PAMiD product line has entered mass production, and the WiFi7 module products are being shipped at scale, indicating a positive trend in product development and market readiness [2]. - The company is focusing on expanding its product matrix in high-value segments and aims to leverage its technology in various applications, including IoT and smart home devices [2]. Investment Recommendation - The company is positioned as a platform enterprise for RF front-end products, maintaining an "outperform the market" rating despite downward adjustments in profit forecasts for 2025-2027 due to weak downstream demand and high initial production costs [3].

Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Views - The company's short-term profitability is under pressure, with a significant decline in revenue and net profit in the first half of 2025. Revenue reached 1.704 billion yuan, down 25.42% year-on-year, and the net profit attributable to shareholders was -147 million yuan, down 141.59% year-on-year [1][2] - The company has entered the mass production and delivery phase for its L-PAMiD product series, which is the first in the industry to achieve a fully domestic supply chain. The WiFi7 module products have also achieved large-scale production and stable shipments [3][6] - The company is expected to see a stabilization and recovery in gross margins as cost reduction points emerge, with production capacity ramping up and operational efficiency improving [2][3] Financial Performance Summary - In the first half of 2025, the company's revenue from RF discrete devices was 899 million yuan (down 29.01% year-on-year), accounting for 53% of total revenue, while RF module revenue was 756 million yuan (down 21.79% year-on-year), accounting for 44% [2] - The company's gross margin decreased to 28.75%, down 13.4 percentage points year-on-year, with R&D expenses reduced by 17.5% to 407 million yuan [1][2] - The financial forecast for 2025-2027 has been adjusted, with net profit estimates revised down to 444 million yuan, 749 million yuan, and 955 million yuan for 2025, 2026, and 2027 respectively [3][5] Key Financial Metrics - The company is projected to achieve revenues of 4.494 billion yuan in 2025, with a slight increase of 0.1% year-on-year. The net profit for 2025 is expected to be 444 million yuan, reflecting a 10.4% increase from 2024 [5][25] - The earnings per share (EPS) for 2025 is estimated at 0.83 yuan, with a PE ratio of 101.6 [5][25] - The company's EBIT margin is projected to be 11.2% in 2025, with a return on equity (ROE) of 4.2% [5][25]

Core Viewpoint - Jiangsu Zhaosheng Microelectronics Co., Ltd. is facing challenges in its performance due to industry demand fluctuations, but anticipates a recovery in gross margins in the future as production efficiency improves and new products are introduced [2][3]. Group 1: Financial Performance - In the first half of 2025, the company reported revenue of 1.703 billion yuan, a year-on-year decrease of 25.42% [2] - The net profit attributable to shareholders was -147 million yuan, a decline of 141.59% compared to the previous year [2] - The gross margin fell to 28.75% due to high costs from initial production phases and increased competition [2] Group 2: Product Development and Market Strategy - The company is focusing on high-end products and expanding into diverse application scenarios, including mobile communication and AI-driven smart devices [3] - New product introductions have made significant progress, including L-PAMiD, WiFi7 modules, low-power Bluetooth chips, and automotive ultra-wideband (UWB) chips [2][3] - The WiFi7 module has achieved large-scale production and stable shipments, primarily for mobile phones, with plans to expand into routers [5] Group 3: Capacity and Patent Situation - The utilization rates of the 6-inch and 12-inch production lines are gradually improving, with future capacity adjustments based on market feedback [4] - The company is involved in patent litigation with Murata, contesting the validity of certain patents and has submitted invalidation requests in South Korea and Shanghai [4] - To ensure stable production, the company has increased raw material reserves due to the diverse types of materials and longer lead times required [4]

Financial Performance - In the first half of 2025, the company's revenue was 1.703 billion CNY, a year-on-year decrease of 25.42% [4] - The net profit attributable to shareholders was -147 million CNY, a decline of 141.59% compared to the previous year [4] - The gross margin dropped to 28.75% due to high costs from initial production phases and increased competition [4] Product Development and Technology - The company is focusing on high-performance RF front-end chips and modules, enhancing its research and development capabilities [2][3] - Key technologies include 6-inch specialty processes, 12-inch heterogeneous silicon-based processes, and advanced heterogeneous integration [3] - New products launched include L-PAMiD, WiFi7 modules, low-power Bluetooth chips, and automotive ultra-wideband (UWB) chips [4] Market Strategy - The company aims to strengthen its position in the RF industry by expanding its product line and enhancing high-end product offerings [5] - Future focus areas include mobile communication, WiFi wireless connections, and short-range communication technologies, with an emphasis on AI-driven smart hardware [5] - The company plans to explore applications in IoT, smart homes, health monitoring, and automotive electronics [5] Advanced Packaging and Production Capacity - Advanced packaging technologies have been successfully validated by key customers, leading to scale production [6] - The utilization rate of 6-inch and 12-inch production lines is gradually increasing, with future capacity adjustments based on market feedback [6] Inventory and Supply Chain Management - The increase in inventory is attributed to the need for raw material reserves to ensure stable production amid long lead times for certain materials [7] Patent and Legal Matters - The company is actively pursuing patent invalidation against claims made by Murata, with ongoing legal proceedings [7]