Core views
The company announced its 2024 semi-annual results. The company's revenue for the first half of 2024 was 4.0.4 billion yuan, up 9.62% year on year; net profit to mother was 37.87 million yuan, a decrease of 54.8% year on year. Delivery of some orders was delayed, putting pressure on current revenue and profit. The company's full-process tools have been further expanded to continuously consolidate its core competitiveness. The layout of various EDA tools has been continuously enriched and improved, and the long-term development trend is steady and improving. We expect the company's 2024-2026 revenue to be 1.25 billion, 1.6 billion, and 2.11 billion, respectively, and net profit to mother of 1.1.2 billion, 0.199 billion, and 0.289 billion, respectively. The corresponding PE is 348x, 197x, and 135x, respectively, and raised to a “buy” rating.
occurrences
The company announced its 2024 semi-annual results. The company's revenue for the first half of 2024 was 0.44 billion yuan, up 9.62% year on year; net profit to mother was 37.87 million yuan, down -54.8% year on year.
Brief review
The company announced its 2024 semi-annual results, and phased revenue will affect current revenue. In the first half of 2024, the company's revenue was 0.44 billion yuan, up 9.62% year on year; net profit to mother was 37.87 million yuan, down -54.8% year on year. Looking at Q2 alone, the company's revenue was 0.23 billion, down 6.0% year on year; net profit to mother was 30.21 million, down 51.8% year on year. Delivery of some orders was delayed, causing pressure on current revenue and profit. The company's sales/management/R&D/finance expense ratios for the first half of the year were 20.37%, 12.86%, 78.7%, and -7.18%, respectively. Management expenses increased due to increased equity payments and personnel.
By business, in the first half of 2024, EDA software sales revenue was 0.386 billion, accounting for 87%; technology development services revenue was 0.052 billion, accounting for 12%; and software and hardware agency sales revenue was 0.006 billion yuan, accounting for 1.3%.
The company's EDA tool layout has been further expanded, continuously consolidating its core competitiveness. The company launched the fully customized design platform EDA tool system, and developed PyAether, a fully customized design platform ecosystem based on a unified database on the basis of the existing fully customized design platform.
PyAether uses artificial intelligence (AI), data mining, data analysis and other technologies to enable users to easily automate design, develop custom functions, optimize workflows, and integrate with third-party tools, greatly improving design efficiency. As the only local EDA company that can provide a full-process EDA tool system for analog circuit design, the company's full-process tools were further expanded in the first half of the year. In the field of analog circuits, the company launched ADA, a new layout parasitic parameter analysis tool, which disrupts the traditional design debugging process and achieves design convergence at the fastest speed. At the same time, in order to meet different design needs, the company has developed various new design functions based on the layout editing tool Aether LE. The parasitic parameter extraction tool rcExplorer has been upgraded in performance and ease of use, and the end-to-end efficiency and ease of use of the entire process have been greatly improved. In the field of digital EDA, the company launched Liberal-GT, a new unit library characterization extraction tool based on the GPU platform. In the field of wafer manufacturing EDA, the company has developed a new Layout Decomposer with multiple mask splitting functions to provide a high-performance EDA solution for splitting mask graphics. The company has optimized and changed technology in many aspects such as flat panel display circuit design EDA, RF circuit design EDA, and storage circuit design EDA.
Investment advice:
Through more than ten years of development and innovation, Huada Jiutian has continuously enriched and perfected the layout of various EDA tools, and the long-term development trend is steady and positive. We expect the company's 2024-2026 revenue to be 1.25 billion, 1.6 billion, and 2.11 billion, respectively, and net profit to mother of 0.112 billion, 0.199 billion, and 0.289 billion, respectively. The corresponding P E is 348x, 197x, and 135x, respectively, and raised to a “buy” rating.
Risk warning:
Downstream demand fell short of expectations. Currently, the country provides high policy support in the semiconductor manufacturing industry, and downstream demand is strong. If future downstream demand growth falls short of expectations due to various factors, it may adversely affect the growth of the company's business revenue.
The pandemic has affected the company's normal production and delivery. The recent recurrence of the domestic epidemic may have an adverse impact on the company's normal production delivery, as well as on project negotiations and progress, resulting in revenue and growth falling short of expectations.
Technological innovation risks. There is some uncertainty about the technology research and development process, and there is uncertainty about the pace of implementation of innovative projects, which may cause revenue to fall short of expectations.