GigaDevice(603986) 华创证券·2024-10-31 12:22Investment Rating - The report maintains a "Strong Buy" rating for Gigadevice (603986) with a target price of 109.76 RMB, compared to the current price of 88.76 RMB [1] Core Views - Gigadevice achieved robust growth in Q3 2024, with revenue reaching 2.041 billion RMB (YoY +42.83%, QoQ +2.97%) and net profit attributable to shareholders of 315 million RMB (YoY +222.54%, QoQ +0.92%) [1] - The company's DRAM business is advancing rapidly, with DDR4 8Gb products successfully taped out and samples provided to customers [1] - Gigadevice increased its 2024 estimated related-party transaction volume with CXMT from 120 million USD to 140 million USD to support future growth [1] Financial Performance - For the first three quarters of 2024, Gigadevice reported revenue of 5.65 billion RMB (YoY +28.56%) and net profit attributable to shareholders of 832 million RMB (YoY +91.87%) [1] - The company's gross margin improved to 41.77% in Q3 2024 (YoY +5.41pct, QoQ +3.62pct), driven by optimized cost structure and product mix [1] - Revenue is expected to grow from 7.455 billion RMB in 2024E to 11.005 billion RMB in 2026E, with net profit projected to increase from 1.148 billion RMB to 1.965 billion RMB during the same period [2] Business Segments - NOR Flash: Gigadevice ranks second globally in SPI NOR Flash, with comprehensive product coverage in high-capacity, high-performance, and low-power segments [1] - DRAM: The company has successfully developed DDR4 8Gb products and offers a range of DRAM solutions from 1Gb to 8Gb capacities [1] - MCU: As China's leading 32-bit Arm® MCU supplier, Gigadevice has launched over 600 products across 51 series, covering various application markets [1] Market Position - Gigadevice maintains a leading position in NOR Flash and MCU markets in China, with DRAM business steadily progressing [1] - The company's market capitalization stands at 59.103 billion RMB, with a P/E ratio of 51x for 2024E [2] Growth Drivers - Recovery in downstream demand, particularly in consumer electronics, has driven revenue growth [1] - Continuous R&D investment and product iteration have strengthened the company's technological and product advantages [1] - The company's strategy focuses on market share expansion and product portfolio optimization [1]