GigaDevice(603986) 高盛·2025-01-14 01:21Investment Rating - The investment rating for the company is "Buy" [1][10]. Core Insights - The management emphasizes a market share-driven strategy, focusing on expanding the market share of key products such as NOR Flash, MCU, and DRAM. Key initiatives include product expansion targeting the automotive market and enhancing cost competitiveness through partnerships and innovation [2]. - The company is poised to benefit from the growth of edge AI, with expectations of increased demand for NOR Flash in AI PCs, AI headphones, and AI glasses, which require higher storage capacities [2]. - The price trend for products has likely bottomed out, but the potential for price recovery remains low [3]. Summary by Sections 2025 Outlook - The management's focus remains on expanding market share, with overall demand expected to remain volatile. The price trend has stabilized at low levels, with limited further downside, and price increases in 2025 are not anticipated [4]. - For NOR Flash, despite intense competition, the company maintains its position as the second-largest global revenue generator. The 2024 shipment volume is expected to be strong, driven by the automotive market and edge AI devices [4]. - The company aims for a 50% year-on-year increase in NOR Flash sales to the automotive sector in 2024, with similar growth targeted for 2025 [4]. MCU and DRAM Insights - The MCU segment is expected to see a slight recovery in 2024, with further observation needed for 2025 due to macroeconomic uncertainties. The overall revenue in the MCU sector has bottomed out in 2024 [5]. - The niche DRAM segment is currently undergoing a temporary inventory digestion phase, with a potential return to supply-demand balance expected in the second half of 2025 [8]. Financial Projections - The company is projected to enter a new growth cycle as it expands into niche DRAM products, supported by a strong increase in market share in mainland China. The NOR Flash and MCU businesses are expected to remain stable, with moderate recovery anticipated from 2024 to 2025 [10]. - The 12-month target price is set at RMB 120, based on a 37x P/E ratio for 2025 [11].