\u3000\u3000 Hangzhou Silan Microelectronics Co.Ltd(600460) (600460)
Event:
The company released the performance forecast for 2021: in 2021, the company is expected to realize the net profit attributable to the parent company of RMB 1.518-1.531 billion, with a year-on-year increase of 2145.09% – 2165.09%.
Key investment points:
The non deduction performance in 2021 meets the expectation, and the product structure continues to be optimized. In 2021q4, the company realized a net profit attributable to the parent company of 790-804 million yuan in a single quarter, with a year-on-year increase of 3287.24% – 3345.20% and a month-on-month increase of 166.22% – 170.78%. In 2021q4, the company realized a net profit of RMB 225-239 million deducted from the non parent company in a single quarter. Considering the impact of Q4 on the accrual of some expenses, the company’s performance was in line with expectations as a whole, mainly due to: 1) the company’s production capacity climbed steadily in 2021, and made breakthroughs in new energy vehicles, photovoltaic and other markets, resulting in a significant increase in the operating revenue and profit of main products, The comprehensive gross profit margin of products has improved significantly; 2) In 2021, the company’s holding subsidiary Shilan Jixin 8-inch line basically maintained full production, and the Shilan Mingxin LED chip production line achieved full production and high yield, both of which achieved annual profits. 3) In 2021, the Shanghai Anlogic Infotech Co.Ltd(688107) listing invested by the company and the introduction of external investors by videocore technology increased the value of the company’s financial assets and the company’s net profit. Benefiting from the technological breakthroughs of Chinese manufacturers, strong downstream demand and the trend of domestic substitution, the company has broad prospects for the development of its businesses. In terms of IGBT, Jibang consulting data show that China’s IGBT market scale in 2019 was 15.3 billion yuan, benefiting from the rapid arrival of downstream demand including new energy vehicles and photovoltaic energy storage. In 2025, China’s IGBT market scale is expected to reach 52.2 billion yuan, and CAGR is 19.1% in 2018-2025. In terms of MEMS sensors, according to the data of China Economic Research Institute, In 2020, the market scale of China’s MEMS industry was 73.67 billion yuan, which is expected to reach 127.06 billion yuan in 2023, and the CAGR from 2020 to 2023 is 19.9%. In terms of power management chips, according to the statistics of Zhiyan consulting, the market scale of China’s power management chips was 43.14 billion yuan in 2016, 75.87 billion yuan in 2020 and 11.9% CAGR in 2016-2020.
The company has actively expanded its production capacity, developed multi-point flowering, and has sufficient growth momentum. The company announced in 2021m12 that it plans to increase capital for the phase II project of 8-inch integrated circuit chip production line. At the same time, the company will add a 12 inch high-voltage integrated circuit and power device chip production line. After the project is completed, the production capacity of 20000 chips / month (equivalent to 12 inches) will be added. The company actively expanded its production capacity to meet the market demand, but also laid the foundation for the company’s rapid development in the future. In terms of product R & D, IGBT: the company’s IGBT module has been successfully introduced into some vehicle enterprises. The fifth generation IGBT vehicle gauge module independently developed by 2021h1 company has passed the certification of many customers in China and is beginning to supply in batches. Photovoltaic IGBT customer verification was carried out in an orderly manner. In terms of IPM module, the company is steadily seizing China’s market share in the field of household appliances and industrial control, and domestic substitution continues to advance. MEMS sensors: the company’s acceleration sensors and other products have been mass produced on the 8-inch line, and most Chinese mobile phone brand manufacturers have used the company’s acceleration sensors in large quantities. The company’s market promotion and R & D of MEMS products such as infrared light sensor, heart rate sensor, silicon microphone and six axis inertial sensor have made steady progress. Power management chip: the fast charging chipset for smart phones and the series of multi protocol fast charging solutions for travel charging, mobile power supply and car charging developed by the company have been applied in Chinese mobile phone brand manufacturers, and the shipment has increased significantly. SiC: the company’s 6-inch SiC pilot line has run through, and SiC diodes are being shipped stably. In terms of equity incentive, 2021m11 company issued an equity incentive plan, which is conducive to the company’s binding of core employees and demonstrates the company’s confidence in future development.
Profit forecast and investment rating: as a leading local power IDM enterprise, the company actively expands production capacity and optimizes product structure. With the booming demand of downstream new energy vehicles, photovoltaic and energy storage combined with the dual vitality of domestic substitution, the company is expected to continue to grow rapidly. We expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.521/13.73/1.626 billion respectively, corresponding to the current PE valuation of 47 / 52 / 44 times respectively. It will be covered for the first time and given a “buy” rating.
Risk warning: the downstream demand is less than the expected risk; Production line construction and product R & D are less than expected risks; The risk of customer import falling short of expectations; Technical iteration is less than expected risk; Industry competition intensifies risks.
