OmniVision reported FY25 results with revenue up 12.1% YoY to RMB28.9bn, 5% below both our estimate and BBG consensus, while net profit rose 21.7% YoY to RMB4.0bn, 2% below our forecast and 9% below BBG consensus. GPM improved to 30.6% in FY25 from 29.4% in FY24, broadly in line with both our estimate and consensus, mainly driven by a richer CIS mix and a higher contribution from auto CIS. By quarter, 4Q25 revenue grew 4% YoY but declined 10% QoQ, mainly reflecting softer smartphone-related shipments and seasonality, while GPM improved sequentially to 31.3%, supported by continued mix upgrade. Looking ahead, mgmt. guides 1Q26 revenue of RMB6.2–6.5bn, with the midpoint implying a 2.3% YoY and 11% QoQ decline, while guiding GPM at 28.7–29.6%, as higher component costs, especially memory-related inflation, continue to pressure downstream demand. Maintain BUY with TP adjusted to RMB136, based on 33.0x 2026E P/E (previous: 33.6x), in line with the Company’s two-year historical forward average.

Core CIS business continued to see a structural mix upgrade, with growth increasingly driven by higher-value auto, emerging/IoT, and medical applications rather than mobile alone. Core CIS revenue grew 10.7% YoY in FY25, while auto/emerging & IoT/medical contributed 35%/11%/5% of segment sales, up from 31%/4%/3.5% in FY24. By contrast, mobile CIS revenue declined 15.6% YoY and its mix fell to 39% from 51% in FY24, pointing to a more diversified growth profile. Mgmt. attributed auto CIS growth to rising camera content per vehicle, accelerating ADAS/AD penetration, and higher value per camera, while emerging/IoT growth was driven by panoramic and action cameras, smart glasses, and edge-AI applications. Mgmt. also highlighted growing customization engagements with leading customers in optical modules; together with the Company’s existing LCOS volume shipments in WSS applications, we view this as early validation of its ability to expand beyond CIS into optical-related opportunities. We expect the CIS business to deliver high-teens growth in FY26E, supported by a further mix shift toward higher-value applications.

Other segments showed a more mixed pattern in FY25. Display revenue declined 8.5% YoY to RMB941mn, mainly due to weaker demand in the smartphone LCD TDDI market, although the Company made progress in product-line optimization. Analog revenue grew 13.4% YoY to RMB1.6bn, supported by deeper customer engagement across power management, driver, and signal-chain products. Auto analog was a key growth driver, with revenue reaching nearly RMB300mn, or close to 20% of Analog sales, up more than 47% YoY on increasing adoption of localized auto components and continued new product ramp-up.

Maintain BUY, with TP adjusted to RMB136. Our new TP is based on 33.0x 2026E P/E, in line with the Company’s two-year historical forward average. We lower our FY26E revenue and net profit forecasts by 10% and 20%, respectively, mainly to reflect a softer mobile demand outlook and continued component cost inflation in FY26E.