Investment Highlights:

Power management products started and extended to the signal chain, with a revenue CAGR of more than 40% from 2018 to 2024. 1) Founded in 2013, the company focused on AC-DC in power management chips in the early stage, vigorously developed DC-DC after 18 years, and was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange in 22 years, and now has four major power management product lines such as AC-DC, DC-DC, linear power supply and battery management, as well as five major signal chain product lines. 2) The actual controllers of the company, ZHOU XUN WEI and Huang Biliang, both worked as design engineers in Sprinter Company and have rich experience; At the same time, 24 years of equity incentives have been implemented to bind the core team. 3) The company's revenue has grown rapidly, with a CAGR of over 40% from 2018 to 2024, and a revenue of nearly 1.7 billion yuan in 2024, a year-on-year growth rate of 30%.

Deeply cultivate the core market of analog chips, adopt the virtual IDM model, and build its own process platform. As of 2023, Jewalt has built a medium and low voltage, high voltage, and ultra-high voltage BCD process platform, which can require wafer fabs to cooperate with the introduction of its own manufacturing process. 1) Comprehensive layout of power management product line: As of 1H24, power management products accounted for more than 9% of the main business income. Among them, DC-DC chips accounted for 50% of the revenue of this business, and AC-DC chips, linear power products, and battery management chips accounted for 31%, 16%, and 3% respectively. 2) In-depth development of signal chain product line: focus on products that are difficult to develop and have a low localization rate. As of 1H24, the company focuses on analog front-end in the converter chip business, and is one of the few design companies in China that has mastered the analog front-end technology of high-string batteries. In the clock chip business, several clock chips have been mass-produced.

The analog chip track where Jewalt is located has a lot of room for improvement in the localization rate. 1) China is the world's most important consumer market for analog chips, and according to data from the China Business Industry Research Institute, the size of China's analog chip market will exceed 300 billion yuan in 2023. 2) The global competition pattern is fragmented, and domestic manufacturers have opportunities to enter. In 2023, Texas Instruments, the world's largest analog chip manufacturer, will account for 16% of the market and 67% of CR10. China's self-sufficiency rate of analog chips has risen from 6% in 2017 to 15% in 2023.

Focus on DrMOS, and the progress of domestic substitution can be expected. 1) The demand for AI computing power is growing rapidly, and the power density of a single AI server has been significantly improved, and the multi-phase power supply is a combination of a multi-phase controller and DrMOS, which can provide a power supply solution for high-performance computing.

According to QYResearch data, the global AI server DrMOS power chip market size will be about $310 million in 2023, and it is expected to reach $830 million in 2030, with a CAGR of 5.3% from 2024 to 2030. 2) Jewalt's 30A, 50A, 70A, and 90A DrMOS have all been mass-produced and ramped up on the client, and the multi-phase controller products will be completed one after another, forming a complete DrMOS+ multi-phase product matrix in PC-server-AI-autonomous driving and other application fields.

Initial coverage, giving the company a "buy" rating. We forecast that the company's revenue in 2024-2026 will be 17, 22, and 2.8 billion yuan.

Referring to the average PS valuation of comparable companies in 2025, Jewalt 8X PS is given, corresponding to a market value of 18 billion yuan, which has an upside of 39% compared with the current market value, and gives the company a "buy" rating.

Risk Warning: The risk of performance loss; product R&D and technology iteration risks; The risk of outsourcing processing and high concentration of suppliers.