\u3000\u3000 Will Semiconductor Co.Ltd.Shanghai(603501) (603501)
Events
The company issued the announcement of performance increase in 2021. It is estimated that the net profit attributable to the shareholders of the listed company will be 4.468 billion yuan to 4.868 billion yuan in 2021, with a median value of 4.668 billion yuan, a year-on-year increase of 72.51%; Corresponding to Q4, the net profit attributable to the parent company in a single quarter was 950 million yuan ~ 1.35 billion yuan, with a median value of 1.15 billion yuan. It is estimated that the net profit of non parent company deduction in 2021 will be 3.918 billion yuan to 4.268 billion yuan, with a median value of 4.093 billion yuan, with a year-on-year increase of 82.32%. The corresponding net profit of non parent company deduction in Q4 in a single quarter will be 850 million yuan to 1.2 billion yuan, with a median value of 1.025 billion yuan.
CIS made breakthroughs in many fields, and the share of automobile / security increased
According to our industrial chain research, since the second half of 2021, under the influence of the epidemic and industrial chain destocking, the demand for consumer terminals is weak, and the inventory level of high pixel CIS is relatively high. According to the company’s performance forecast, in 2021, the company will continue to optimize the market layout, increase the layout of CIS in automobile, security and other fields, and improve the market share. According to icinsights data, the global CIS market is expected to reach US $33.6 billion by 2025, including US $15.7 billion for mobile phone CIS market, US $5.1 billion for automobile CIS market and US $3.2 billion for security CIS market. The company has accumulated profound experience in the field of on-board CIS, and its forward-looking 8m pixel products are comparable to the world’s leading manufacturers, and the company continues to strengthen cooperation with NVIDIA, horizon and other upstream and downstream industrial chains to further enhance the company’s competitiveness in the field of on-board CIS. From the latest information on NVIDIA’s official website, it can be seen that howay’s various vehicle regulation CIS products have actively participated in the latest compatibility scheme of NVIDIA, We believe that the company is expected to further increase its market share in the field of vehicle regulation CIS in the future, and taking over mobile phones has become another important catalyst for the company.
The gross profit margin of panel driven IC changes little in the short term, and the substitution is accelerated
According to our industry chain research, panel driven IC overall price or gross profit margin will not change significantly in the next 1~2 quarter. The outlook for 2022 Q2 will still be determined by the supply and demand relationship. The panel driven IC supplier in Taiwan of China will adjust the product structure accordingly according to the capacity of the panel plant. At present, the prices of large-size TV products have been adjusted due to weak demand, and the prices of small and medium-sized TV products are expected to remain high due to the continuous increase in the demand for OLED and vehicle related products. Mobile phone mobile phone long time OLED has been a major driver of IC in China. The China Mobile’s IC driver has dominated the market share in the past long period. With the breakthrough of OLED in China, the domestic OLED driving IC is expected to be matched. In smartphone TDDI, the market share of the company is dominated by the companies in China and the future will focus more on OLED and vehicle related fields. We predict that driving IC is the most critical link in the panel industry chain. After this round of shortage and price increase, the stability of supply and product reliability are the first factors considered by intelligent terminal manufacturers, and China’s leading enterprises are expected to benefit fully. Relying on the innovation and iteration of tddi products, the company further expands end customers and achieves rapid growth.
Investment advice
We maintain the previous profit forecast and predict that the company’s revenue from 2021 to 2023 will be 27 billion yuan, 35 billion yuan and 46 billion yuan respectively; The net profit attributable to the shareholders of the parent company was 4.607 billion yuan, 6.530 billion yuan and 8.902 billion yuan respectively; EPS5. They are 26 yuan / share, 7.46 yuan / share and 10.17 yuan / share respectively. The PE corresponding to the closing price of 262.5 yuan on January 27, 2022 is 49.90 times, 35.20 times and 25.82 times respectively. Based on the growth path of overseas semiconductor leading enterprises, we believe that kuanracetrack high-quality companies gradually meet the platform development opportunities, continue to grow bigger and stronger, firmly value the company’s long-term investment value and maintain the “buy” rating.
Risk tips
The innovation of optical track is lower than expected, the shipment of intelligent terminal is lower than expected, the breakthrough of new products is lower than expected, the breakthrough of new semiconductor products is lower than expected, the expansion of customers is lower than expected, and the price pressure caused by the intensification of industry competition.
