Event: The company disclosed its 2024 annual report and 2025 first quarter performance forecast. In 2024, the company will achieve revenue of 3.639 billion yuan, a year-on-year increase of 59.20%, and a net profit attributable to the parent company of 1.412 billion yuan, a year-on-year increase of 213.10%.

The company expects to achieve operating income of about 1.222 billion yuan in the first quarter of 2025, an increase of about 65.78% over the same period of last year, and is expected to achieve a net profit attributable to the owners of the parent company of 510 million yuan ~ 550 million yuan in the first quarter of 2025, an increase of 128.28%-146.19% over the same period of last year.

Comments:

Global server demand has picked up, and the company's operating performance has increased significantly in 2024. In 2024, the global demand for servers and computers will pick up, and the company will seize the opportunity of industry recovery and continue to increase technological innovation and market expansion, driving significant growth in operating performance. In terms of memory interface chips, the company's demand for memory interface and module supporting chips has achieved recovery growth, and at the same time, benefiting from the increase in the penetration rate of DDR5 downstream and the continuous iteration of the subgeneration, the company's DDR5 memory interface chip shipments have exceeded DDR4 memory interface chips, and the shipments of DDR5 second-generation memory interface chips have exceeded the first-generation products. On the other hand, benefiting from the trend of the AI industry, the company's three new high-performance capacity chip products (PCIeRetimer, MRCD/MDB and CKD) began to be shipped on a large scale, among which: PCIe Retimer chips have been applied on a large scale in the downstream, MRCD/MDB chips and CKD chips have begun to be tried on an industry scale, and the total sales revenue of the three new products is about 422 million yuan, which is 8 times that of the previous year, contributing new performance growth points to the company. In terms of business, the company's interconnection chip product line achieved sales revenue of 3.349 billion yuan, an increase of 53.31% over the previous year, and the gross profit margin was 62.66%, an increase of 1.30 percentage points over the previous year; Jindai's server platform product line achieved sales revenue of 280 million yuan, an increase of 198.87% over the previous year.

R&D drives innovation and development, and a number of performance indicators in 24Q4 hit new highs. The company drives the development of enterprises with R&D innovation, and the total R&D investment expenses in 2024 will be 763 million yuan (including expensed and capitalized expenses), a year-on-year increase of 11.98%, accounting for 20.97% of revenue. As of the end of 2024, the company has 536 R&D technicians, accounting for about 74.65% of the company's total headcount, of which 62.87% have a master's degree or above. During the reporting period, the company continued to innovate, steadily promoted the R&D and iterative upgrading of products, continuously enriched product categories, and drove performance improvement; In terms of quarters, in the fourth quarter of 2024, the company achieved operating income of 1.068 billion yuan, a year-on-year increase of 40.43% and a quarter-on-quarter increase of 17.90%, of which the sales revenue of the interconnection chip product line was 972 million yuan, an increase of 40.27% year-on-year and 14.54% quarter-on-quarter, and the gross profit margin was 63.42%, an increase of 1.21 percentage points from the third quarter; In 24Q4, the company achieved a net profit attributable to the owners of the parent company of 434 million yuan, an increase of 99.72% year-on-year and 12.67% month-on-month; The net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was 374 million yuan, an increase of 74.87% year-on-year and 13.63% month-on-month. The increase in the company's operating performance in the fourth quarter of 2024 was mainly due to strong demand for DDR5 memory interface chips and increased shipments.

25Q1 operating performance continued to grow rapidly, and the whole year is expected to show a good growth trend. In the first quarter of 2025, the company expects revenue to increase by 65.78% year-on-year, of which the revenue of interconnection chips is about 1.139 billion yuan, a year-on-year increase of about 63.92%, a month-on-month increase of about 17.19%, and a net profit attributable to the parent company of 510-550 million yuan, a year-on-year increase of 128.28%-146.19%, and a month-on-month increase of 17.59%-26.82%.

In the first quarter of 2025, the company expects revenue, interconnection chip sales revenue, net profit attributable to the parent company, and net profit attributable to the parent company to hit a record high in a single quarter, of which the sales revenue of interconnection chips, net profit attributable to the parent company, and net profit attributable to the owners of the parent company have achieved quarter-on-quarter growth for eight consecutive quarters. Looking forward to 2025, it is expected that the demand and penetration rate of DDR5 memory interface chips will increase significantly compared with 2024, and the demand for high-performance transportation capacity chips is expected to show a good growth trend.

Investment advice: It is expected that the company's earnings per share in 2025-2026 will be 1.72 yuan and 2.33 yuan respectively, and the corresponding PE will be 43 times and 32 times respectively, maintaining a "buy" rating.

Risk warning: the risk that the product technology iteration is less than expected, and the risk that the downstream demand is less than expected.