2025-06-14-花旗集团-CR_Micro（688396）_华润微（688396.SS）_模型更新；评级下调至中性_14页_601kb

Citi Research has downgraded CR Micro (688396.SS) from "Buy" to "Neutral" due to its shares being fairly valued, with stable demand from sectors like consumer electronics and autos, but ongoing industry over-supply persisting, which continues to pressure pricing and margins.

Key elements from the action include:

• Revenue and earnings forecasts for 2025 and 2026 have been lowered by 5-6% and 21-6%, respectively, reflecting a more conservative outlook.
• Despite potential demand growth from AI infrastructure for PMICs, the power semiconductor industry's over-capacity remains a drag on margins.
• The target price is unchanged at RMB47, based on a 43x 12-month forward P/E multiple, as the stock is deemed appropriately valued.

Risks are emphasized, such as continued over-supply, aggressive capacity expansion, and intense competition from domestic and international players, which could hinder price recovery. Upside catalysts could include stronger consumer electronics demand, industry consolidation, and increased adoption of PMICs in China's AI initiatives.

CR Micro's business model involves both product solutions and contract manufacturing, with around 51% of revenue from products and 46% from manufacturing services. The company's reliance on sectors like smartphones and industrial applications is noted, with auto growth remaining modest but supported by electrification.

The management's view and valuation suggest no immediate buy or sell recommendation, highlighting the company's ability to generate positive earnings amid industry challenges.