Technical barriers + ecological synergy + domestic substitution, the core beneficiaries under the semiconductor cycle recovery
Core Insights
Allwinner Technology (300458.SZ), as a leading smart application processor SoC designer in China, is experiencing a dual boost in performance and valuation thanks to its layout in three high-growth sectors: automotive electronics + robotics + industrial control. In the first half of 2025, revenue reached 1.337 billion yuan (up 25.82% year-on-year), with a net profit of 161 million yuan (up 35.36% year-on-year), and a non-recurring net profit growth rate of 65.97%, with a gross margin rising to 33.03%, significantly outperforming the industry average. The company’s technological iteration and ecological synergy capabilities are outstanding, with breakthroughs in RISC-V architecture and 12nm process mass production, combined with a recovery in downstream demand, leading to a projected compound annual growth rate of over 40% in performance over the next three years, targeting a market value of 45 billion+ yuan.
I. Fundamentals: Performance Exceeds Expectations, Overall Improvement in Operational Quality
1. Financial Performance Continues to Lead the Industry
- High Growth in Revenue and Profit: In H1 2025, revenue was 1.337 billion yuan (up 25.82% year-on-year), net profit was 161 million yuan (up 35.36% year-on-year), and the growth rate of non-recurring net profit reached 65.97%, significantly higher than the revenue growth rate, reflecting an optimization in profit quality.
- Gross Margin Increases Against the Trend: Gross margin at 33.03% (up 0.06 percentage points year-on-year), net margin at 12.05% (up 0.85 percentage points year-on-year), achieving simultaneous growth in volume and profit under cost pressures in the semiconductor industry, demonstrating the effectiveness of product structure upgrades.
- Excellent Cost Control: R&D investment of 275 million yuan (up 4.3% year-on-year), but the R&D expense ratio decreased to 20.57% (down 4.27 percentage points year-on-year), with scale effects diluting costs; sales/administrative expense ratios decreased by 0.54 and 0.45 percentage points respectively.
2. Diverse Business Structure Resists Cycles
- Smart Automotive Electronics: The T527V in-vehicle chip has entered trial production, and the T736 smart cockpit solution is about to be delivered, having penetrated high-end modules such as AR-HUD and smart laser headlights, covering mainstream automotive manufacturers.
- Robotics Chips: The MR536 sweeping robot chip is in mass production, and the new generation MR153 supports multi-sensor fusion (infrared/ToF/laser), suitable for cleaning robots, drones, and other scenarios.
- Industrial and Consumer Electronics: The industrial-grade T153 chip has been released (integrating Arm + RISC-V heterogeneous architecture), with mass production of projection chips H723/H135, and sample validation of TV323 completed, fully covering the needs of smart home and industrial automation.
II. Technical Barriers: Dual Engines of 12nm + RISC-V, Accelerating Domestic Substitution
1. Dual Breakthroughs in Process and Architecture
- 12nm Process Mass Production: The heterogeneous computing platform has achieved mass production at 12nm, with cost performance surpassing international competitors by 30%-50%, supporting the high-end tablet chip A733 to pass Google certification.
- RISC-V Ecological Positioning: Collaborating with Alibaba’s Pingtouge to develop the Xuantie C910/C906 core chips, compatible with the HarmonyOS, and the XR806 wireless MCU opens up the IoT market.
2. Leading Algorithms and Energy Efficiency
- Self-developed video stabilization algorithm empowers the mass production of AI glasses V821, reducing power consumption by 40%;
- Automotive-grade ISO 26262 certification + Tina-IESP industrial software platform meet industrial real-time control and safety requirements (e.g., IEC-60730 Class-B).
III. Growth Logic: Three Engines Driving High Order Visibility
1. Automotive Electronics: Increasing Penetration of Smart Cockpits
- Accelerated landing of pre-installed projects for in-vehicle chips, with T527V/T736 adapting to high-value modules such as AR-HUD and digital dashboards, increasing the single-chip value to 15-20 (traditional chips 5-8).
- Policy-driven: The “old-for-new” automotive policy stimulates demand for smart cockpits, with expected revenue growth of over 50%+ in automotive electronics by 2025.
2. Robotics: Core Beneficiary of the Humanoid Industrialization Wave
- The MR153 chip supports multi-modal sensing (gyroscope/ultrasonic/line laser), already introduced to sweeping machines and industrial robot customers, with expected shipments to exceed 20 million units by 2025.
- Tesla’s Optimus is about to enter mass production, with domestic robot supply chain substitution space exceeding 10 billion yuan.
3. Industrial Control: Launch of Domestic 2.0 Strategy
- The industrial chip T153 has been released (quad-core A7 + RISC-V), suitable for PLCs, HMIs, and industrial gateways, providing an ultra-long supply cycle (10 years+), breaking the monopoly of Europe and the US.
- Ecological Cooperation: Building the “Industrial Chip Alliance” with Feilin Embedded and CODESYS, with expected order growth of 300% by 2025.
IV. Catalysts and Valuation: High Institutional Consensus, 30% Upside Potential in Target Price
1. Institutional Consensus is Positive
- Southwest Securities: Target price of 63 yuan (corresponding to a 2026 PE of 105x), with an upside potential of +24%;
- China Galaxy: Expected net profits of 341 million/447 million/591 million yuan for 2025-2027, with a CAGR of 42%;
- Within 90 days, 6 institutions have covered (2 buy + 4 increase), with northbound funds continuously increasing their holdings (Hong Kong Central Clearing holds 37.65 million shares).
2. Valuation Restructuring Dynamics
- Current PE-TTM is 109x, higher than the industry average (semiconductor design sector PE 70x), but high growth supports the premium: → Expected net profit of 350 million yuan in 2025 (PE 100x), and net profit of 670 million yuan in 2027 (PE drops to 50x).
V. Risk Alerts and Operational Strategies
Short-term Risks:
- Inventory turnover pressure: Inventory growth of 25.86% in H1 2025, need to pay attention to the pace of destocking;
- Exchange rate fluctuations: Overseas revenue accounts for 26.55% (H1 2025), appreciation of the yuan affects gross margin.
Long-term Barriers:
- Ecological synergy: Full-stack adaptation of Harmony/RISC-V/Industrial OS, strong customer stickiness;
- Automotive certification: One of the few domestic chip design companies to pass ISO 26262, with high substitution barriers.
Operational Recommendations:
- Short-term: Track Q3 automotive electronics order landing (T736 delivery progress), and customer introduction of industrial chip T153;
- Medium to Long-term: Layout for the volume increase of robotics chip MR153 and the benefits of RISC-V ecological expansion.
Conclusion: The All-Rounder of Domestic SoCs
Allwinner Technology, leveraging its threefold advantages of technological platformization (12nm + RISC-V), diversified application scenarios (automotive/robotics/industrial), and ecological collaboration (Alibaba/Huawei/China Mobile), has transformed from a consumer electronics chip manufacturer into a core platform for “pan-intelligence”. In the wave of AIoT, automotive electronics, and robotics domestic substitution, its growth momentum and valuation elasticity should not be underestimated. Finally, I wish all investors: may your holdings remain in the green, and your accounts flourish! (This article represents personal views and does not constitute investment advice)