Summary of Shenzhen Longsys Electronics Co Ltd Conference Call Company Overview - Company: Shenzhen Longsys Electronics Co Ltd (301308.SZ) - Industry: Semiconductors, specifically focusing on memory products such as DRAM and NAND - Current Price Target: Raised from Rmb122.00 to Rmb325.00, indicating a 17% upside from the current level [1][3][21] Key Insights Market Dynamics - The memory market is experiencing a supercycle, with suppliers and module makers maintaining strong bargaining power due to ongoing shortages expected to last until the end of 2026 [1][2] - Contract prices for DRAM and NAND are projected to increase by 25-30% quarter-over-quarter (QoQ) in Q4 2025, with specific high-capacity products like 96GB server RDIMM seeing a 70% QoQ increase [2][11] - The average selling price (ASP) for NAND has recently been around US$0.08-0.09/GB, compared to US$0.13 during the previous peak in 2021 [2] Financial Performance - Longsys has revised its gross profit margin forecast for 2026 to 25%, up from the previous peak of 20% in 2021, driven by a better product mix and cost savings from in-house developed controller products [3][20] - Earnings per share (EPS) estimates have been significantly increased: 78% for 2025, 216% for 2026, and 73% for 2027 [21][24] - Revenue projections for 2026 are set at Rmb38.2 billion, with net income expected to reach Rmb4.3 billion [24] Risks and Considerations - Module maker share prices are more volatile than suppliers', which could impact investor sentiment regarding margin sustainability [4] - Valuation appears stretched historically, but the AI supercycle is expected to support structural growth in the memory industry [4] - Potential risks include prolonged commodity down-cycles and competition from new entrants in the Chinese memory market [42] Additional Insights - Longsys is focusing on enterprise business expansion and a shift to a TCM (Total Cost Management) model, which is expected to enhance its growth and margin profile [30][34] - The company is also exploring long-term agreements with major cloud service providers (CSPs) for capacity expansion, although no agreements have been finalized yet [11][20] - The stock is rated as "Overweight" by Morgan Stanley, reflecting a positive outlook on the company's growth prospects amid the ongoing memory market upcycle [6][30] Conclusion Shenzhen Longsys Electronics Co Ltd is positioned to benefit from the ongoing supercycle in the memory market, with strong financial projections and a strategic focus on enterprise growth. However, investors should remain cautious of market volatility and potential risks associated with competition and pricing dynamics.
江波龙- 乘超级周期崛起；目标价上调至 325 元人民币