CRM(SH:688396)2025-11-04 01:56Summary of China Resources Microelectronics Limited Conference Call Company Overview - Company: China Resources Microelectronics Limited (688396.SS) - Industry: Technology Semiconductors - Market Cap: Rmb70,216.1 million - Current Stock Price: Rmb53.49 (as of October 30, 2025) - Price Target: Rmb40.00, indicating a downside of 25% from the current price [6][6][6] Financial Performance - 3Q25 Earnings: - Revenue: Rmb2.9 billion (flat Q/Q, up 5% Y/Y) - Gross Margin: 27.9% (up from 25.9% in 2Q25) - Operating Margin: 10.3% (down from 10.7% in 2Q25) - EPS: Rmb0.14 (down 27% Q/Q, down 15% Y/Y), which was 64% below Morgan Stanley estimates and 36% below consensus [1][1][1] - 4Q25 Outlook: - Targeting 10% revenue growth for 2025, with expected revenue of Rmb3.1 billion in 4Q25 (up 7% Q/Q, 16% Y/Y) - Anticipated slight decrease in gross margin due to annual maintenance in December [2][2][2] Competitive Landscape - Market Position: CR Micro is recognized as a key player in China's power semiconductor localization trend - Competition: The company is aware of peers' capacity expansion plans, but actual capacity ramp-up may take two years [3][3][3] Investment Rating - Current Rating: Equal-weight (EW) - Analyst View: While CR Micro is a significant player in the market, competition in the analog foundry sector remains intense due to overcapacity in mature nodes over the past 2-3 years [3][3][3] Financial Projections - Future EPS Estimates: - 2025: Rmb1.15 - 2026: Rmb1.56 - 2027: Rmb2.04 [6][6][6] - Revenue Projections: - 2025: Rmb11,649 million - 2026: Rmb13,511 million - 2027: Rmb15,178 million [6][6][6] Valuation Methodology - Methodology: Residual income model with an 8.2% cost of equity, a payout ratio of 20%, medium-term growth rate of 16.0%, and terminal growth rate of 5.5% [9][9][9] Risks - Upside Risks: Higher than expected self-sufficiency rate for MOSFETs in China and increased MOSFET content per electric vehicle - Downside Risks: Lower than expected self-sufficiency rate and pricing pressure from local peers [10][10][10] Conclusion - The financial results indicate steady revenue growth but highlight pressures on earnings. The competitive landscape remains challenging, and while the company is positioned well within the industry, the outlook suggests cautious optimism with potential risks to both upside and downside.