Gelonghui, October 18 | SPDB International Research Report indicates that China Resources (688396.SH) is recovering from the bottom of the power semiconductor cycle. The company's capacity utilization rate will remain at full capacity starting in June 2024. Although the price of IGBT is still unstable, the price of MOS products has stabilized. It is expected that China Resources Micro's revenue in the second half of this year will increase compared to the first half of the year, and gross margin will remain steady, moderate, and slightly rising. Demand in the new energy sector will recover from previous lows in the second half of this year, while the automotive sector will maintain a high level of growth. Looking ahead to next year, the bank believes that the driving force of China Resources Micro's business mainly comes from three components: 1) MOS products, including medium- and low-voltage products, which continue to increase; 2) the rapid growth of MOS, IGBT, TMBS, IPM, and SiC module products; and 3) power ICs contribute to growth through localization trends and new production lines. Therefore, we remain optimistic that the company's fundamentals will continue to improve next year. The three categories of MOS, module products, and power IC products will drive the company's performance growth. Currently, China Resources's micro forward price-earnings ratio is 48x. There is still room for improvement compared to historically high valuations, reaffirming the “buy” rating.