The company released its 2024 annual report and 25Q1 performance forecast. The company's performance in 24 years has achieved rapid growth, with revenue of 3.64 billion yuan, an increase of 59% year-on-year, and net profit attributable to the parent company of 1.41 billion yuan, an increase of 213% year-on-year; It mainly benefits from the increase in DDR5 penetration rate and the volume of high-performance computing chips. Among them, the revenue in 24Q4 was 1.07 billion yuan, an increase of 40%, and the net profit attributable to the parent company was 434 million yuan, an increase of 100%. The company is expected to achieve revenue of about 1.22 billion yuan in 25Q1, an increase of 66% year-on-year, and a net profit attributable to the parent company of 510 million yuan ~ 550 million yuan, an increase of 128% ~ 146% year-on-year. The

demand for memory interfaces and module supporting chips has achieved resilient growth, and the penetration rate of DDR5 has continued to increase. Benefiting from the gradual recovery of demand in the global server and computer industries, the demand for memory interfaces and module supporting chips has achieved recovery growth. As a leader in the memory interface chip industry and a leader in the formulation of international standards for DDR5 RCD chips, the company continues to lead the competition in the DDR5 generation. The company's DDR5 memory interface chip shipments exceeded DDR4 memory interface chips, DDR5 second-generation memory interface chip shipments exceeded the first-generation RAM chips, the third-generation RCD chips began to be shipped on a large scale, and the fifth-generation RCD chips have been successfully sent samples to customers.

PCIe Retimer chip shipments are growing rapidly, with cumulative shipments exceeding one million. As one of the two major suppliers of PCIe 5.0 Retimer chips in the world, the company's PCIe Retimer chip shipments have grown rapidly in 24 years, with a cumulative shipment of more than one million chips, and its market share has increased significantly. In January 25, the company launched the PCIe 6.x/CXL 3.xRetimer chip and successfully sent samples, the chip uses self-developed PAM4 SerDes IP, with low transmission delay and high link budget, and the maximum data transmission rate can reach 64GT/s.

MRCD/MDB chips and CKD chips have begun to be trialed on an industry scale, which is expected to contribute new performance growth points to the company. The company is the leading formulator of international standards for MDB chips and CDK chips, leading related technological innovation and maintaining a leading position in the industry. In 24 years, the MRDIMM with Montage Technology's first generation MRCD/MDB chips began to be trialed on an industry scale, driving the company's MRCD/MDB chip sales revenue to grow significantly. In addition, the company launched the second generation MRCD/MDB chip in January 25. In terms of CKD chips, the company took the lead in trial production of CKD chips and began large-scale trials in the industry, contributing more than 10 million yuan in sales revenue to the company. It is expected that from 2025, MRCD/MDB chips and CKD chips will be applied on a large scale in the downstream.

We forecast the company's 25-27 earnings per share to be 1.75, 2.52 and 3.29 yuan respectively (the original forecast for 25-26 years is 1.85/2.52 yuan, mainly adjusting the main business income), according to the 25-year average PE of comparable companies 67 times, the corresponding target price is 117.25 yuan, and maintain a buy rating.

Risk Warning:

DDR5 market share growth is not as expected The new product is not progressing as expected.