On September 23, 2024, the 2nd Design Automation Industry Summit (IDAS2024) hosted by the EDA Association was held in Zhangjiang, Shanghai. Huada Jiutian and the EDA Technical Committee jointly pre-released the EDA technology roadmap, pointing out the direction for innovation and development of the EDA industry.

Deeply cultivate the EDA industry and focus on creating full process coverage. The company's current EDA tool software products and services cover fields such as analog circuit design, storage circuit design, radio frequency circuit design, digital circuit design, flat panel display circuit design, wafer manufacturing, and advanced packaging design. At present, the coverage of full-process design tools has been achieved in the fields of analog circuit design, storage circuit design, RF circuit design, and flat panel display circuit design, and the coverage of full-process tools has also been continuously improved in other EDA fields such as digital circuit design.

Continue to improve the product lineage and make up for the shortcomings of core EDA tool products. In the first half of '24, the company's product matrix continued to be enriched, and full-process capabilities are being completed at an accelerated pace: 1) On the basis of the existing fully customized design platform, PyAether, a fully customized design platform ecosystem, was developed based on a unified database; 2) In the field of analog circuit design, ADA, a new graphical parasitic parameter analysis tool was launched to disrupt the traditional design debugging process and accelerate design convergence; 3) In the field of digital circuit design, Liberal-GT, a new unit library characterization extraction tool based on the GPU platform was launched, using parallel processing of GPUs to accelerate the unit library Characteristic extraction simulation; 4) In the EDA field of wafer manufacturing, a new LayoutDecomposer with a multi-mask split function has been developed to provide a high-performance EDA solution for splitting mask graphics; 5) In the field of advanced packaging, the functions and algorithms of the automatic wiring tool Storm continue to be enhanced and optimized.

Investment advice: We expect Huada Jiutian's revenue for 2024-2026 to be 1.273 billion yuan, 1.6 billion yuan, and 1.934 billion yuan, respectively, and net profit to the parent company will be 0.147 billion yuan, 0.246 billion yuan, and 0.32 billion yuan, respectively. Considering that the company is a leading domestic EDA enterprise, the competitive barriers in the industry are high, and the company has accumulated a deep level of technology, products, customer resources, etc., and maintains an “gain” rating.

Risk warning: risk of technological innovation; risk of industrial policy changes; increased industry competition; development of digital circuit EDA design tools falls short of expectations.