Espressif Systems(688018) 华福证券·2024-07-30 00:30Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark index within the next 6 months [20]. Core Insights - The company achieved a revenue of 920 million yuan in H1 2024, representing a year-over-year increase of 38%, with Q2 revenue reaching 530 million yuan, up 53% year-over-year and 38% quarter-over-quarter [2]. - The net profit attributable to the parent company for H1 2024 was 150 million yuan, a significant year-over-year increase of 135%, with Q2 net profit at 98 million yuan, reflecting a 192% year-over-year growth and an 81% quarter-over-quarter increase [2]. - The company's gross margin for H1 2024 was 43.2%, up 2.6 percentage points from the previous period, while the net margin was 16.6%, an increase of 7.1 percentage points [2]. - The company is positioned as a leader in the AIoT industry, with strong performance recovery trends and projected net profits of 330 million, 470 million, and 640 million yuan for 2024, 2025, and 2026, respectively, corresponding to PE ratios of 35, 24, and 18 [4]. Summary by Sections Revenue and Profitability - The company reported a revenue of 1,433 million yuan for 2023, with projections of 2,005 million yuan for 2024, 2,599 million yuan for 2025, and 3,211 million yuan for 2026, indicating a growth rate of 40% in 2024 [18]. - The net profit for 2023 was 136 million yuan, with forecasts of 326 million yuan for 2024, 472 million yuan for 2025, and 635 million yuan for 2026, reflecting a growth rate of 140% in 2024 [18]. Market and Industry Outlook - The global IoT device connections are expected to reach 18 billion by 2024 and grow to 39.6 billion by 2033, with a compound annual growth rate of 9.18% [3]. - The smart home market is projected to generate revenues of 154.4 billion USD in 2024, with a compound annual growth rate of 10.67% over the next five years [3]. - The company aims to expand its market beyond IoT devices, targeting a market capacity increase of 2.5 times, and is focusing on a dual strategy of "processing + connectivity" for AIoT SoC development [4]. Financial Projections - The company is expected to achieve a gross margin of approximately 40.9% and a net margin of 18.9% by 2025, with an EPS of 4.21 yuan [18]. - The projected financial ratios indicate a strong growth trajectory, with a significant increase in both revenue and net profit over the next few years [18].