ASR(688220)2025-01-25 08:00Investment Rating - The report maintains an "Outperform" rating for the company [6]. Core Insights - The company has a comprehensive portfolio in cellular baseband chips, covering all standards from 2G to 5G, and has a strong position in the IoT market with a leading share in the 4G Cat.1bis segment [2][18]. - The company is expected to experience rapid growth over the next three years, with projected net profits of -673 million, -331 million, and 39 million CNY for 2024, 2025, and 2026 respectively [4][8]. - The company has a robust R&D capability, with a high proportion of its workforce holding advanced degrees, which supports its innovation and product iteration capabilities [41][35]. Summary by Sections Business Overview - The company operates in three main segments: chip products, customized chip services, and IP licensing, with chip products accounting for 86.4% of revenue in 2023 [19]. - The company has made significant acquisitions, including the purchase of Marvell's mobile communications division, enhancing its technology and market position [26][27]. Market Position - The global cellular IoT market is projected to grow at a CAGR of nearly 10%, with the company holding the largest share in the 4G Cat.1bis segment [2]. - The company is well-positioned in the wearable device market, with its first RedCap wearable chip already in production [3]. Financial Performance - The company has shown consistent revenue growth, with a CAGR of 59.7% over the past four years, despite facing losses due to high R&D investments [32][35]. - The projected revenue for 2024 is 33.86 billion CNY, with a significant increase expected in subsequent years [8]. Profitability and Valuation - The company’s estimated valuation ranges from 354 to 398 billion CNY, indicating a premium of 31.8% to 48.3% over the current stock price [4]. - The gross margin for chip products is around 20.2%, while the IP licensing segment boasts a much higher margin of 88.9% [38].