Willsemi(603501) 浦银国际证券·2024-08-21 02:00Investment Rating - The report maintains a "Buy" rating for the company, Weir Shares (603501.CH), with a target price adjusted to RMB 108.4, indicating a potential upside of 21% from the current price of RMB 89.7 [2][3]. Core Insights - The semiconductor cycle shows strong upward momentum, with the company's revenue growth and gross margin improving sequentially in Q2. The gross margin is expected to continue improving in the second half of the year. The company is experiencing growth across its business segments, including mobile, automotive, and display driver sectors [2][3]. - The Q2 performance aligns with the company's earnings forecast, showing a 14% sequential revenue growth and a 43% year-over-year increase. The gross margin reached 30.2%, marking a 2.4 percentage point increase from the previous quarter and a 12.9 percentage point increase year-over-year [2][6]. - The company is focusing on high-end projects in mobile CIS, which are expected to drive growth in the second half of the year. The automotive CIS segment is also maintaining high growth through product iteration, while the display driver business is set for significant growth next year [2][3]. Financial Performance and Forecast - The company’s revenue for 2024 is projected to be RMB 26,579 million, with a year-over-year growth rate of 26%. The gross margin is expected to be 30.7% in 2024, improving to 33.6% by 2026 [3][7]. - Net profit is forecasted to reach RMB 3,204 million in 2024, with a significant increase of 477% compared to the previous year. The basic earnings per share are expected to be RMB 2.64 in 2024, rising to RMB 4.25 by 2026 [3][7]. - The report utilizes a DCF valuation method, assuming a WACC of 9.5% and a perpetual growth rate of 3%, leading to a target price of RMB 108.4 [2][8][10]. Business Segment Analysis - In the mobile CIS segment, the company is increasing its market share in high-end camera modules, with gross margins expected to exceed 30%. The automotive CIS segment is also projected to grow significantly due to product upgrades and expansion into non-CIS products [2][3]. - The display driver business is expected to maintain its leading position in the market, with an increase in product models and advantages in the supply chain [2][3]. - Continuous investment in R&D is aimed at enhancing product performance and process technology, ensuring competitive advantages and expanding market opportunities [2][3].