Sinolink Securities initiates coverage on Ankai Micro with Buy rating

Sinolink Securities Co., Ltd. recently published a research report on Ankai Micro (688620), initiating coverage with a "Buy" rating. The report, titled "Stable SoC Foundation, Multi-Product Volume Growth Drives Earnings Recovery," highlights the company's turnaround prospects.

Investment Thesis

New Product Launches and Price Increases Drive Earnings Recovery

Ankai Micro's products are primarily used in consumer-grade smart cameras, smart security systems, smart locks, AI glasses, smart audio devices, and HMI (Human-Machine Interface) hardware. In 2025, the company launched 8 product lines and 16 chips, with new product shipments exceeding 17 million units.

In the first half of 2026, the company reported revenue of RMB 436 million, representing a year-over-year increase of 85.99%. Net profit attributable to shareholders reached RMB 40 million, turning profitable from a loss in the prior-year period. The comprehensive gross margin recovered to 39.64%, an increase of 24.35 percentage points year-over-year.

Expanding Smart Vision Terminals, AI Boosts Chip Value

Consumer smart cameras continue to form a stable revenue base. Global shipments are expected to grow from 187 million units in 2025 to 262 million units by 2028. Meanwhile, multi-camera configurations, low-power designs, and on-device AI are steadily increasing the value of vision SoCs.

According to IDC's Global Smart Glasses Market Quarterly Tracker, global smart glasses shipments reached 14.773 million units in 2025, up 44.2% year-over-year. The smart glasses market maintained rapid growth in the first half of 2026. Data from RUNTO shows that China's smart glasses sales reached 909,000 units across all channels in H1 2026, a year-over-year increase of 85.5%. Among these, camera-equipped glasses accounted for 34.4% of sales, indicating continued penetration of vision capabilities into smart glasses terminals.

M&A Strengthens Connectivity and Graphics Capabilities, Multi-Chip Platform Opens Growth Potential

At the end of 2025, Ankai Micro announced a planned cash acquisition of an 85.79% stake in Sizhe Technology for RMB 326 million, with the business registration change completed in February 2026. Sizhe Technology's expertise in low-power Bluetooth, MCU, and graphics processing complements Ankai Micro's existing capabilities in vision, audio/video, and HMI. This expands the company's chip coverage from visual perception to include audio interaction, wireless connectivity, low-power control, and graphic display. This positions the company to move from single-chip solutions to multi-product combinations in terminals such as AI glasses and smart locks, increasing both chip count per device and overall value.

Additionally, the company's 12nm chip under development is expected to launch within 2026, further building its portfolio of higher-performance edge AI products.

Earnings Forecast, Valuation, and Rating

Sinolink Securities forecasts the following for 2026–2028:

| Metric | 2026E | 2027E | 2028E | |---|---|---|---| | Revenue (RMB) | 924 million | 1.203 billion | 1.447 billion | | Revenue Growth | 72.16% | 30.14% | 20.25% | | Net Profit Attributable to Shareholders (RMB) | 50 million | 84 million | 132 million |

Given the continued ramp-up of new products, improving product mix, and gradual expansion of the multi-chip platform, Sinolink initiates coverage with a "Buy" rating.

Risk Factors

• Weaker-than-expected downstream demand
• Intensified market competition
• Product iteration delays
• Risk of major shareholder share reduction
• Risk of lock-up share expiration
• Gross margin volatility

Note: The latest detailed earnings forecast is included in the original report. This content is sourced from Sinolink Securities and is for reference only. It does not constitute investment advice.