公司发布半年报，上半年实现营收16.65 亿元，同比+79%，归母净利润5.93 亿元，同比+624%，扣非归母净利润5.44 亿元，同比+14179%，综合毛利率57.78%，同比+1.5pcts。Q2 实现营收9.28亿元，同比+83%，归母净利润3.70 亿元，同比+495%，扣非归母净利润3.25 亿元，同比+9133%，综合毛利率57.83%，同比+4.5pcts，环比+0.1pcts。Core views
The company released its semi-annual report. In the first half of the year, it achieved revenue of 1.665 billion yuan, +79% year on year, net profit of 0.593 billion yuan, +624% year on year, net profit not attributable to mother of 0.544 billion yuan, +14179% year on year, and a comprehensive gross profit margin of 57.78%, +1.5pcts year over year. The company has gone through the 23H1 industry's inventory difficulties. Fundamentals have rebounded strongly since 23H2. 24Q2 revenue and net profit reached record highs, and will continue to benefit from the DDR5 upgrade cycle for servers and PCs. On the AI side, Retimer has begun large-scale shipments, and the market share has increased significantly. MRCD/MDB and CXL are on the verge of release, and the three AI capacity chips are building a new growth curve. It is recommended to focus on it.
occurrences
The company released its semi-annual report. In the first half of the year, it achieved revenue of 1.665 billion yuan, +79% year on year, net profit of 0.593 billion yuan, +624% year on year, net profit of 0.544 billion yuan without return to mother, +14179% year on year, and a comprehensive gross profit margin of 57.78%, +1.5pcts year over year. Q2 achieved revenue of 0.928 billion yuan, +83% YoY, net profit 0.37 billion yuan, +495% YoY, net profit without return to mother 0.325 billion yuan, YoY +9133%, comprehensive gross profit margin of 57.83%, +4.5pcts YoY, +0.1pcts month-on-month.
Brief review
Memory interface chips: Revenue reached a record high, and gross margin continued to rise. The server-side DDR5 penetration rate has further increased. The company's RCD and supporting chip revenue grew steadily month-on-month, and the three AI capacity chips grew rapidly, driving continued growth in revenue and profits.
Q2 interconnect product line revenue reached a record high of 0.833 billion yuan, +67% YoY, +20% month-on-month, gross profit margin 63.68%, and +2.8pcts month-on-month. In the first half of the year, the company's DDR5 second generation RCD shipments surpassed that of the first generation. The third generation will begin large-scale shipments in the second half of the year, which is expected to boost the unit price and gross margin of the product. CKD, a memory interface chip for AI PCs, generated more than 10 million yuan in revenue in the second quarter. It is expected that large-scale shipments will be made in the second half of the year with the release of Intel's next-generation PC processors, increasing revenue and profits.
AI capacity chip: New product scale shipment, construction of a new growth curve. The revenue of the three AI power chips grew rapidly. Q2 revenue in a single quarter was 0.13 billion yuan, which more than doubled from month to month.
1) PCIe retimer: Benefiting from the rapid growth in demand for AI servers, the company's PCIeRetimer 5.0 doubled quarterly. The 24Q1-Q2 shipped 0.15 million units and 0.3 million units. It is estimated that Q3 is awaiting delivery orders of about 0.6 million units, and the global market share is rapidly increasing.
2) MRCD/MDB: Mainstream cloud computing/Internet vendors at home and abroad have begun large-scale trials. 24Q1-Q2 has generated more than 20 million yuan and 50 million yuan in revenue, which is on the eve of deployment. 3) CXL MXC: In May 2023, Samsung launched the first 128GB DRAM supporting CXL 2.0. Equipped with the company's MXC products, the CXL ecosystem is gradually improving, and the company is in a leading position.
Profit prediction and valuation: The company has gone through the 23H1 industry's difficult inventory removal period. Fundamentals have rebounded strongly since 23H2. 24Q2 revenue and net profit reached record highs, and will continue to benefit from the DDR5 upgrade cycle for servers and PCs. On the AI side, Retimer has begun large-scale shipments, and the market share has increased significantly. MRCD/MDB and CXL are on the verge of release, and the three AI capacity chips are building a new growth curve. The estimated net profit for 24-26 is 1.445 billion yuan, 2.357 billion yuan, and 3.425 billion yuan, respectively, corresponding to PE 41x, 25x, and 17x. It is recommended to focus on it.
Risk analysis
1. DDR5 penetration falls short of expectations. Currently, the server and PC industry is in the inventory replenishment stage. DDR5 still has a premium compared to DDR4, and customer procurement intentions are uncertain. If inventory replacement falls short of expectations and demand falls short of expectations, then DDR5 penetration rate falls short of expectations, which will affect the company's related product shipments; 2. New product development falls short of expectations. The company is promoting research and development of DDR5 successor RCD, DDR5 second generation MRCD/MDB, and CXL MXC. There are many new product developments, and technical barriers are high. There is a risk that R&D will fall short of expectations; 3. Geopolitical risks. The company's main direct customers are DRAM module manufacturers, and its indirect customers and partners are server manufacturers and CPU manufacturers. Most of the manufacturers are overseas companies. If geopolitical friction intensifies, it will increase supply chain risks.
