豪威集团（603501）：Higher-value CIS mix expansion supports margin resilience

豪威集团(603501) 　　OmniVision reported FY25 results with revenue up 12.1% YoY to RMB28.9bn,5% below both our estimate and BBG consensus, while net profit rose 21.7% YoYto RMB4.0bn, 2% below our forecast and 9% below BBG consensus. GPMimproved to 30.6% in FY25 from 29.4% in FY24, broadly in line with both ourestimate and consensus, mainly driven by a richer CIS mix and a highercontribution from auto CIS. By quarter, 4Q25 revenue grew 4% YoY but declined10% QoQ, mainly reflecting softer smartphone-related shipments andseasonality, while GPM improved sequentially to 31.3%, supported by continuedmix upgrade. Looking ahead, mgmt. guides 1Q26 revenue of RMB6.2–6.5bn, withthe midpoint implying a 2.3% YoY and 11% QoQ decline, while guiding GPM at28.7–29.6%, as higher component costs, especially memory-related inflation,continue to pressure downstream demand. Maintain BUY with TP adjusted toRMB136, based on 33.0x 2026E P/E (previous: 33.6x), in line with theCompany’s two-year historical forward average. 　　Core CIS business continued to see a structural mix upgrade, withgrowth increasingly driven by higher-value auto, emerging/IoT, and medicalapplications rather than mobile alone. Core CIS revenue grew 10.7% YoY inFY25, while auto/emerging & IoT/medical contributed 35%/11%/5% ofsegment sales, up from 31%/4%/3.5% in FY24. By contrast, mobile CISrevenue declined 15.6% YoY and its mix fell to 39% from 51% in FY24,pointing to a more diversified growth profile. Mgmt. attributed auto CIS growthto rising camera content per vehicle, accelerating ADAS/AD penetration, andhigher value per camera, while emerging/IoT growth was driven by panoramicand action cameras, smart glasses, and edge-AI applications. Mgmt. alsohighlighted growing customization engagements with leading customers inoptical modules; together with the Company’s existing LCOS volumeshipments in WSS applications, we view this as early validation of its abilityto expand beyond CIS into optical-related opportunities. We expect the CISbusiness to deliver high-teens growth in FY26E, supported by a further mixshift toward higher-value applications. 　　Other segments showed a more mixed pattern in FY25. Display revenuedeclined 8.5% YoY to RMB941mn, mainly due to weaker demand in thesmartphone LCD TDDI market, although the Company made progress inproduct-line optimization. Analog revenue grew 13.4% YoY to RMB1.6bn,supported by deeper customer engagement across power management,driver, and signal-chain products. Auto analog was a key growth driver, withrevenue reaching nearly RMB300mn, or close to 20% of Analog sales, upmore than 47% YoY on increasing adoption of localized auto components andcontinued new product ramp-up. 　　Maintain BUY, with TP adjusted to RMB136. Our new TP is based on 33.0x2026E P/E, in line with the Company’s two-year historical forward average.We lower our FY26E revenue and net profit forecasts by 10% and 20%,respectively, mainly to reflect a softer mobile demand outlook and continuedcomponent cost inflation in FY26E.