卓胜微（300782）：Transition pains persist; wait and HOLD

卓胜微(300782) 　　Maxscend released its FY25results.Revenue declined by17%to RMB3.7bn(9%below BBG consensus and ours),while net loss was RMB293mn.GPMdeclined by13.8ppts to25.7%(1ppt below BBG consensus/6ppts below ours)due to1)low utilization rates at both6-inch(~50%)and12-inch(30-40%)fabs,2)an unfavorable product mix due to the delay in higher-margin module rampand a greater contribution from lower-value products,and3)increased rawmaterial costs driven by AI-related demand crowding.More fundamentally,theCompany remains in a transition phase toward a fab-lite model with elevateddepreciation and ramp inefficiencies continuing to pressure near-term earnings.Maintain HOLD on the Company with TP revised to RMB91,correspondingto45x2027E EV/EBITDA(rolled forward from45x2026E)to reflect thedelayed pace of margin normalization and earnings recovery.We lower oursales forecast for2026/27E by24%/27%,and GPM by8.7ppts/8.2ppts,reflecting intensified market competition and low fab utilization. 　　Revenue mix gradually improving on L-PAMiD ramp,though stillbelow potential.We view L-PAMiD as the key driver of medium-termrecovery,given its successful entry into domestic tier-1supply chains andclear advantages in cost,size,and integration via bare-die packaging.InFY25,RF module mix increased to45%(from42%in FY24),althoughabsolute revenue declined11%YoY due to delayed ramp and supplyconstraints earlier in the year.Meanwhile,RF discrete revenue mix fell to52%(from56%),with revenue declining~22%YoY,reflecting both weakerend demand and pricing pressure in more commoditized segments.Weexpect mix to continue improving into2026on the back of L-PAMiD rampand increasing contribution from high-integration modules. 　　1Q26earnings showed early signs of stabilization,but marginpressure persists.Revenue grew9%YoY to RMB828mn but declined14%QoQ due to seasonality,while GPM fell to18.5%(vs.31%in1Q25and22.8%in4Q25)in1Q26,reflecting continued low utilization,elevateddepreciation,and ongoing pricing pressure as the Company prioritizesshare gains.We expect revenue to gradually recover through2026on L-PAMiD ramp,but margin recovery will likely lag,with meaningfulimprovement contingent on utilization ramp and higher contribution fromcustomized higher-value modules. 　　12-inch Xinzhuo fab a long-term strategic asset with limited near-termcatalysts.The fab has reached stable mass production with competitiveyields and supports key processes such as SOI(silicon on insulator)andheterogeneous integration,enabling internalization of high-value modules.While low utilization continues to weigh on margins,we see it driving long-term competitiveness and potential margin upside,with earningscontribution dependent on utilization ramp. 　　Maintain HOLD with TP revised to RMB91,corresponding to rollover2027E EV/EBITDA of45x(prev.45x2026E EV/EBITDA)as we expect salesto stabilize on L-PAMiD ramp while profitability remains constrained by lowutilization and elevated depreciation,both of which are unlikely to materiallyimprove within2026.However,we think the Company deserves a premiumto peers due to its unique positioning as a vertically integrated,full-stackRFFE player while most other peers remain fabless or partially integrated.Upside risks:Improving end market demand,raw material price reduction,etc.;downside risks:Worsening end market demand,R&D challenges,etc.