\u3000\u3000 Gigadevice Semiconductor (Beijing) Inc(603986) (603986)
Key investment points
In recent January, the retail price of the company's MCU representative products has been stable as a whole, and the price has increased steadily in the past week: from 2021 to 2022, the contribution to the company's performance increment is mainly MCU business. We regularly focus on tracking the retail price change trend of 67 MCU products, in order to track the changes of the company's MCU business. In addition, as the leader of 32-bit MCU in mainland China, the price change also reflects the overall prosperity of the industry. In the past month (2022 / 1 / 4-2022 / 2 / 6), the retail prices of some products of M23, m3 and M4 series have slightly loosened in the middle of the month, but the prices have rebounded in the past week, and the prices have been generally stable in the past month, reflecting that the company's MCU products and MCU industry still maintain a high outlook. By product: 1) M23 series: the whole series is positioned at the low end. Among the six product models tracked, only one product has loose price in recent month. 2) M3 series: it is applied in high, middle and low end. Among the 28 product models tracked, the price of only 4 products has decreased in recent month. Among them, the prices of five high-end products are strong, only one is reduced, the prices of 12 middle-end products are stable, and the prices of three of the 11 low-end products have decreased. 3) M4 series: it mainly focuses on medium and high-end products. The number of tracked models is 33. There are 31 high-end + middle-end models and only 2 low-end models, of which only 2 products are reduced in price. The price of only one of the 12 high-end products decreased, the price of only one of the 19 middle-end products decreased, and the price of two low-end models remained stable. In the past week (2022 / 1 / 24-2022 / 2 / 6), the retail price of M23, m3 and M4 totaled 67 products, and the retail price of 13 models increased. The price of only 3 models decreased, and the price increased steadily as a whole. By product: 1) M23 series: among the 6 low-end models tracked, the price of 3 models increased. 2) M3 series: among the 28 products counted, 5 have raised prices and 3 have reduced prices in the past week. Among them, one of the five high-end models raised the price, two of the 12 middle-end models raised the price, and two of the 11 low-end models raised the price and three reduced the price. 3) M4 series: 33 products, with 5 price increases. Among them, the prices of 12 high-end products have been stable and stable in the past week, 4 of the 19 middle-end products have raised prices, and 1 of the 2 low-end products has raised prices.
We emphasize once again that the company, as a dual leader in the mainland storage + MCU industry, will continue to benefit from the dual logic of "localization" + "product structure optimization" in 2022. 1) Nor business, the third largest in the world and the leader in the mainland, continues to optimize the company's product structure due to the distribution of storage capacity, application fields and processes. 2) MCU business, the 32-bit leader in the mainland, continues to benefit from the low self-sufficiency rate of the local market, and the upgrading of products to industry and automobile continues to bring structural optimization. 3) DRAM business has a very low self-sufficiency rate in the mainland, and self-research has developed rapidly. According to the company's announcement, it is estimated that 860 million yuan will be purchased from private brands and 1.08 billion yuan will be purchased from DRAM on a commission basis in 22 years; From January to November of 21, the actual amount of self-developed procurement and OEM was only 189 million, with a leap year-on-year growth. According to the calculation that wafer foundry accounts for 75% of the total manufacturing cost and 30% of the gross profit margin, the corresponding revenue is 1.6 billion yuan, and self research has developed rapidly. For details, please refer to the report Gigadevice Semiconductor (Beijing) Inc(603986) : the perfect ending of 2021, "localization + product structure optimization" is still the main logic of 2022 released on January 24, 2022.
Investment suggestion: it is estimated that the net profit in 2021, 2022 and 2023 will be 23.1/32.2/4.03 billion yuan respectively, and the corresponding PE will be 41 / 29 / 23 times. Considering that the company is the double leader in the mainland storage + MCU industry, under the background of localization, there is strong downstream demand, continuous optimization of product structure, both scarcity and growth, and maintain the "buy" rating.
Risk warning event: the prosperity of MCU and nor may be lower than expected, and the OEM cost increases. The company cannot bring the risk of pressure on gross profit margin through product structure adjustment or price increase.
