Acquired Marvell's mobile communications division, covering all cellular baseband chips. In 2017, the company acquired the mobile communications division of Marvell, a global benchmark for wireless communication chips, and has communication technology covering 2G to 4G. The company mainly includes three categories of business, chip products, chip customization services, IP licensing, etc., of which chip products include cellular baseband chips and non-cellular baseband chips. The

cellular IoT market has a CAGR of nearly 10%, and the company's 4G Cat.1bis has the largest share in the world. According to Counterpoint data, the global cellular IoT revenue will be about US$13.7 billion in 2023 and is expected to exceed US$26 billion in 2030, with a CAGR of nearly 10%. 2G/3G is gradually moving to 4G/5G, the cellular Internet of Things is reorganized in the rate echelon, and 4G Cat.1bis is expected to become the best choice in medium and low speeds, and according to TSR's 2023 statistics, the company's Cat.1bis market share has reached the world's first. In addition, the proportion of AI cellular module shipments is expected to continue to increase, and is expected to reach 25% by 2030. In terms of 5G RedCap, the company has a leading layout, and the first high-performance and high-integration ASR1903 has entered mass production.

Smartphone chips have broken through from 0 to 1, and smart wearable chips have accumulated steadily. According to IDC data, in 2023, about 1.38 billion mobile phones will be shipped worldwide, including about 1.164 billion smartphones and 216 million feature phones, and among smartphones, about 700 million 5G mobile phones and 450 million 4G mobile phones. Low-priced smartphones with a unit price of less than $300 are the main force of market shipments, accounting for about 59.83% of the overall share. The company has sufficient technical reserves in the field of smartphone chips, and ASR8601 the flagship quad-core 4G chip has achieved a breakthrough on the Logicmobility L65A in Latin America. In addition, the company's octa-core 4G main control ASR8661 is poised to take on par with competitors of the same type. In terms of wearables, with Apple's promotion of 5G Redcap, the wearable field is expected to upgrade from 4G Cat.1/4 to 5G Redcap, and the company's first RedCap smart wearable chip ASR3901 As a cost-effective product for smart wearable devices, it has passed the certification of China Mobile and is expected to continue to increase in volume in the future.

Makimoto's law swings towards the demand for customization, and the AI ASIC capability is leading in China. According to the Makiben pendulum, IC products will oscillate alternately between "standardization" and "customization" every ten years, and the current Makiben pendulum on the AI computing power side is expected to gradually swing from standardization to customization. According to Marvell, the data center ASIC market is expected to reach $42.9 billion by 2028, with a CAGR of 45.5%. The company's ASIC capabilities are leading in China, and it has provided ultra-large-scale chip customization services for artificial intelligence cloud inference under advanced technology for several well-known artificial intelligence technology companies such as the world's leading artificial intelligence platform company S, Denglin Technology, and Moffett in the United States. In terms of IP, the company has developed and accumulated most of the analog and digital IPs such as 2G to 5G multi-mode communication protocol stack IP, ISP, display, LPDDR2/3/4x, USB2/3Phy, PCIe PHY, etc., and has accumulated profound technology.

Profit forecast and valuation: The company is in a period of rapid growth in the next three years, and it is expected that the net profit attributable to the parent company in 2024-2026 will be -6.73/-3.31/0.39 billion yuan, and the EPS will be -1.61/-0.79/0.09 yuan respectively. Through profit forecasts and assumptions, it is estimated that the company's reasonable valuation is 35.4-39.8 billion yuan, a premium of 31.8%-48.3% over the current stock price.

Risk warning: the risk of falling product prices due to fierce competition; the risk of lagging new product development; geopolitical risks; the risk of capacity constraints in advanced processes; the risk of continuous loss of the company, etc.