\u3000\u3000 Changsha Jingjia Microelectronics Co.Ltd(300474) (300474)
Event: Recently, the company issued several Announcements: ① the 2021 stock option incentive plan grants reserved stock options to incentive objects; ② Intends to participate in the capital increase project of Shanghai AVIC avionics Co., Ltd. (hereinafter referred to as “AVIC”); ③ Change the accounting firm from Tianzhi international accounting firm originally appointed to zhongruicheng accounting firm.
Equity incentive promotes the long-term development of the company. 142 people are reserved for granting this stock option incentive, and the granting objects are all core management and technical (business) backbones. The number of stock options is 1333000, and the exercise price is 122.69 yuan / share. Performance evaluation indicators: Based on the net profit in 2020, the net profit growth rate in 2022 / 2023 shall not be less than 50% / 100% respectively. As the leader of GPU localization, Changsha Jingjia Microelectronics Co.Ltd(300474) has benefited from paying attention to the sustainable development of the quantity and quality of talent team since its listing. In 2015, the company had 204 R & D personnel, and by the end of June 2021, the R & D personnel had grown to 797. At the same time, the overall number of employees of the company also increased from 370 to 1174; Through the implementation of two rounds of equity incentive (2017 and 2021 respectively), the company has further stimulated the creative potential of talents.
Analysis of the mapping relationship between talent strategy and product strategy of Changsha Jingjia Microelectronics Co.Ltd(300474) . On the one hand, NVIDIA, as the target of the company’s benchmarking and learning, has impressed the market with its huge talent team (13775 employees in 2020). NVIDIA has also been able to become an industry leader in business lines such as games (mainly display) and data center (mainly Computing). On the other hand, the market questioned the talent reserve scale of Changsha Jingjia Microelectronics Co.Ltd(300474) some time ago. However, Changsha Jingjia Microelectronics Co.Ltd(300474) dispelled the doubts of the market through the accelerated launch of three generations of intergenerational products of series 5, Series 7 and series 9. Behind this, it reflects the late development advantage in the field of integrated circuit design and the strategic determination of Changsha Jingjia Microelectronics Co.Ltd(300474) focusing on graphic display and concentrating top soldiers to overcome difficulties.
The capital increase of AVIC is expected to promote the development of the company’s military products business. Changsha qianzhilong Micro Electronics Co., Ltd., a wholly-owned subsidiary of the company, plans to increase the capital of AVIC with 67.6875 million yuan, holding 28.50% of the equity after the capital increase. AVIC avionics is a wholly-owned subsidiary of AVIC (Shanghai) aviation radio electronic technology Co., Ltd., which is mainly engaged in the development, production and sales of communication and navigation equipment, supporting products and parts, electronic components, etc. its performance indicators: in 2020, the revenue was 351 million yuan and the net profit was 03 million yuan; In the first nine months of 2021, the revenue was 190 million yuan and the net profit was – 09 million yuan. We believe that the company’s capital increase in AVIC’s subsidiaries is expected to deepen cooperation with military customers, help promote the deep integration of military informatization and enhance the company’s sustainable development ability.
Substantial growth of civil products + stable growth of military products, with excellent performance in 2021. The company announced its performance announcement in 2021. The annual revenue is expected to reach 1.080-1.200 billion yuan, with a year-on-year increase of 65.20% – 83.55%, and the net profit attributable to the parent company is 270-320 million yuan, with a year-on-year increase of 30.27% – 54.39%. Reasons for high performance growth: ① civil products: we judge that the substantial increase in product sales in the field of chips mentioned in the company’s announcement is mainly due to the large volume of jm7200 chips, which are mainly used in desktop office computers in the general field. The substantial growth indicates that the company has made remarkable achievements in the development of civil products market. Looking forward to the future, with the recent release of the 14th five year plan to promote national government informatization, China’s information and innovation industry is expected to usher in a new round of vision. As one of the core joints of the information and innovation industry, GPU will fully benefit. We are optimistic about the continuous expansion of Changsha Jingjia Microelectronics Co.Ltd(300474) 7 series and 9 Series in the field of information and innovation. ② Military products: the company’s main products in the military field include picture display modules and small specialized radars. Among them, the figure display module mainly adopts the jm5400 chip developed by the company, which realizes the domestic substitution in the military field. In recent years, the company has carried out technological innovation and product expansion according to the application needs of different industries, achieved obvious leading advantages in the field of airborne, and actively extended to other fields. For the broader application fields such as vehicle mounted, ship display and control and general market, the company continues to develop and provide appropriate graphic display and control modules and their supporting products. At the industry level, during the 14th Five Year Plan period, the packaging of weapons and equipment will enter a large-scale stage, and the procurement is expected to improve, which will fully benefit the company.
9 series has been tested, and we look forward to the follow-up promotion. In November 2021, the company’s jm9 Series graphics processing chips were tested in stages, and the indicators met the design requirements. It can be seen from the disclosed parameters that the performance of jm9 series is roughly equivalent to the gtx10 series chips launched by NVIDIA in 2016. The intergenerational difference has been shortened to about 5 years, and the pace of catching up with foreign countries continues to accelerate (the intergenerational difference between the company’s third-generation GPU chips and similar foreign products is 12 years, 7 years and 5 years respectively). We believe that the promotion and volume of Series 7 have laid a good foundation for the follow-up progress of series 9. With the completion of the test of series 9 chips, the follow-up ecological construction with complete machine manufacturers, system manufacturers and CPU manufacturers will be steadily promoted, and the volume is worth looking forward to.
Maintain the “buy” rating: according to the 2021 performance forecast disclosed by the company, and taking into account the rhythm of delivery confirmation of civil products and the impact of share based payment expenses, we adjust the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 282 million, RMB 452 million and RMB 657 million (the previous values are RMB 353 million, RMB 521 million and RMB 718 million), The corresponding PE is 121, 75 and 52 times respectively.
9. Less than expected promotion progress of civil chip series
