VeriSilicon(SH:688521)2025-12-31 16:02Summary of VeriSilicon Conference Call Company Overview - Company: VeriSilicon (688521.SS) - Industry: Semiconductor and IP solutions Key Points New Orders and Revenue Growth - New orders in 4Q25 reached a historical high of Rmb2.5 billion, representing a 57% increase QoQ and 130% YoY growth, driven by strong demand in AI and data processing projects [1][2] - In 3Q25, new orders grew 35% QoQ to Rmb1.6 billion, with revenues growing 119% QoQ [1] AI and Data Processing Contribution - Contribution from AI computing projects increased to 84% in 4Q25, up from 65% in 3Q25 [2] - Data processing projects contributed 76% in 4Q25, with cloud projects remaining the major contributor [2] Earnings Revision - Earnings for 2026E-2030E revised down by 8% to 14% due to lower revenue contributions from higher-margin semi design services and IP solutions [3] - Gross margin (GM) is expected to decrease by 0.3 to 1.9 percentage points in the same period due to product mix changes [3] Financial Projections - Revenue projections for 2025E revised to Rmb3.56 billion, down from Rmb3.57 billion, and for 2026E to Rmb4.94 billion, down from Rmb5.27 billion [7] - Net income projections for 2026E revised down to Rmb722 million from Rmb788 million, reflecting an 8% decrease [7] Valuation and Price Target - The 12-month target price is revised down to Rmb243 from Rmb284, implying an upside of 80% based on a 60x P/E multiple for 2029E earnings [11][15] - The target price reflects robust growth potential driven by generative AI demand [11] Risks - Potential risks include slower-than-expected technology development, higher talent acquisition costs, and weaker customer spending on IP and new chipset projects [12] Market Position - VeriSilicon is positioned as a leading semi IP and turnkey solution provider, benefiting from the generative AI trend [1][2] Conclusion - The company maintains a Buy rating, supported by strong order momentum and growth opportunities in AI and data processing sectors [1][11]