Maxscend Microelectronics Company Limited(SZ:300782)2025-04-14 06:58Summary of the Conference Call for 卓胜微 (Zhuosheng Micro) Company Overview - Company Name: 卓胜微 (Zhuosheng Micro) - Stock Code: 300782.SZ - Current Rating: Downgraded to "Reduce" [1][30] Key Points and Arguments 1. Long-term Outlook: The company is expected to solidify its market and technological leadership due to its vertical integration strategy, which aims to provide an attractive cost structure and advanced module products [1][16]. 2. Short-term Challenges: Short-term profit pressures are anticipated to continue for several quarters due to rising costs from self-owned capacity ramp-up and price competition, particularly in low-end discrete products [1][30]. 3. Market Demand: Demand for Android smartphones is weaker than expected, which poses a risk to the company's valuation [1][30]. 4. Intellectual Property Issues: Potential intellectual property disputes with Murata are also seen as a negative factor for short-term valuation [1][30]. 5. Earnings Forecast: Adjusted earnings per share (EPS) for 2025 is projected at 0.64 yuan, down from a previous estimate of 3.23 yuan, and for 2026 at 2.17 yuan, down from 3.88 yuan [3][11]. 6. Revenue Projections: Revenue for 2025 is expected to be 5.284 billion yuan, a decrease of 21% from previous estimates, and for 2026 at 6.355 billion yuan, a decrease of 15% [22][23]. 7. Profit Margin Expectations: The gross margin is expected to recover slowly, with projections of 36.8% for 2025 and 37.0% for 2026, reflecting increased depreciation and competitive pricing pressures [22][23]. 8. Target Price: The target price has been set at 56.00 yuan, based on a 22x forward P/E ratio, which is a 25% discount to the historical average [1][30]. 9. Future Review: A recommendation to reassess the company in the second half of 2025 is suggested, as profitability may improve and the share of advanced RF modules in flagship smartphones is expected to rise [1][30]. Additional Important Information 1. Sales Performance: In Q4 2024, the company reported revenue of 1.1 billion yuan, with a stable gross margin of 36%, despite high depreciation costs from new capacity [7][30]. 2. Losses Reported: The company reported an operating loss of 7 million yuan and a net loss of 24 million yuan, primarily due to increased costs associated with new capacity ramp-up and technology-related expenses [7][30]. 3. Market Competition: Increased competition among domestic RF front-end manufacturers is noted, particularly in low-end products, while high-end modules remain less affected [16][30]. 4. Long-term Growth Drivers: The company is expected to benefit from integrated solutions that optimize performance, a better cost structure from self-supplied components, and flexible capacity allocation [1][16]. 5. Investment Risks: Risks include stronger-than-expected smartphone shipments, better-than-expected 5G penetration in overseas markets, and faster market share gains from new products. Conversely, risks also include intensified price competition and slower-than-expected launches of new RF front-end modules [41][30]. This summary encapsulates the critical insights from the conference call regarding 卓胜微, highlighting both the challenges and potential growth avenues for the company in the context of the current market environment.