occurrences

Juchen Co., Ltd. released its 2024 semi-annual report: in the first half of 2024, the company achieved operating income of 0.515 billion yuan, an increase of 62.37%; achieved net profit attributable to shareholders of listed companies of 0.143 billion yuan, an increase of 124.93% year on year; realized net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss of 0.145 billion yuan, an increase of 222.60% year on year.

Key points of investment

Revenue increased steadily, and net profit grew rapidly

In the first half of 2024, demand in the downstream application market gradually picked up. The company continued to upgrade technology, and the company's shipments grew rapidly. Industrial-grade EEPROM products and voice coil motor driver chip products benefited from the successful iteration of the product line. Shipments of SPD products, NOR Flash products and automotive-grade EEPROM products grew rapidly year-on-year, driving the company to achieve revenue of 0.515 billion yuan in the first half of the year, an increase of 62.37% over the previous year. Along with the sales of the company's high-value-added market products The share increased, and the company's profitability was greatly enhanced. Net profit to mother was 0.143 billion yuan, an increase of 124.93% over the previous year.

DDR5 penetration rate continues to increase, and SPD sales increase year-on-year

In response to the latest DDR5 memory technology, the company cooperated with Lanqi Technology to develop SPD products supporting next-generation DDR5 memory modules. They are mainly used in UDIMM, SODIMM, CAMM2 and other memory modules in the personal computer field, and memory modules such as RDIMM, LRDIMM, and MRDIMM in the server field, and have been used on a large scale in major memory module manufacturers in the industry. In the first half of the year, as the penetration rate of DDR5 memory modules continued to increase and the inventory levels of downstream memory module manufacturers improved, the sales volume of the company's SPD products equipped with DDR5 memory modules increased dramatically year-on-year, which became an important driving force for the company's performance growth.

Industrial-grade and automotive-grade EEPROMs achieve rapid growth and accelerate penetration

Benefiting from the gradual recovery in demand in the downstream terminal application market, the company achieved rapid growth in shipments of high-reliability EEPROM products used in the field of industrial control, driving the sales volume and revenue of the company's industrial-grade EEPROM products to maintain a relatively rapid year-on-year growth level. At the same time, the company has initially formed a mature automotive-grade EEPROM product line. In the first half of the year, it actively expanded key overseas markets such as Europe, South Korea, and Japan. Automotive-grade EEPROM products were successfully introduced into many of the world's leading automotive electronics Tier 1 suppliers. Product sales and revenue achieved rapid year-on-year growth and accelerated penetration into automotive core component applications.

Profit forecasting

The company's revenue for 2024-2026 is 1.088, 1.416, and 1.763 billion yuan, and EPS is 2.18, 3.18, and 4.24 yuan, respectively. The PE corresponding to the current stock price is 21.5, 14.7, and 11.0 times, respectively. The company accelerated the shipment of many products, increased sales significantly, and maintained a “buy” investment rating.

Risk warning

Macroeconomic risks, risk of product development falling short of expectations, risk of increased industry competition, risk of downstream demand falling short of expectations.