\u3000\u3000 Montage Technology Co.Ltd(688008) (688008)
Core view
Significant performance growth in the fourth quarter: the company released the performance forecast for 2021, which is expected to achieve a revenue of 2.56 billion yuan, a year-on-year increase of 40%; The net profit attributable to the parent company was 830 million yuan, a year-on-year decrease of 25%; The net profit deducted from non parent company was 620 million yuan, a year-on-year decrease of 19%. In the fourth quarter, the revenue was 970 million yuan, an increase of 12% month on month and 173% year-on-year; The net profit was 320 million yuan, an increase of 55% month on month and 40% year on year; The non net profit deducted was 260 million yuan, with a month on month increase of 40% and a year-on-year increase of 237%.
The number of ddr5 related chips and the interconnection chip business continue to improve: in addition to the original memory interface chip, ddr5 memory module also needs to be matched with supporting chips, and the market scale is expected to increase significantly. Intel sapphire rapids processor supporting ddr5 is expected to be launched in the first half of 2022, benefiting from the stock of the industrial chain before the formal listing of the new server platform. From the fourth quarter of the 21st year, the company’s ddr5 memory interface chip and memory module supporting chip have begun to grow in scale. The revenue of interconnection chip product line in the fourth quarter was 600 million yuan, with a month on month increase of 40%, A year-on-year increase of 77% and a gross profit margin of 69.2%. At the same time, at present, the company’s grade-2 ddr4rcd chip products have been shipped on a small scale, and the application scenario of car specification level is expected to open up growth space in the future.
Tianjin capture server business is expected to grow rapidly: Lanqi’s Tianjin capture server CPU and hybrid secure memory module products have the advantages of high security and sound ecosystem, and have entered key fields such as finance and transportation. The revenue of Lanqi Jinchuan server platform has increased significantly in 21 years, with a revenue of 850 million yuan, a year-on-year increase of 2751% and a gross profit margin of 10.2%. Although the revenue of this part decreased month on month in the fourth quarter, the company expects the amount of related procurement with Intel to be 2.5 billion yuan in 2022, an increase of 58% compared with 2021. We are optimistic about the subsequent growth. In the future, with the growth of the business volume of this part, the gross profit margin is expected to increase simultaneously.
Overweight new generation pcle retimer chip: the company expects to invest 520 million yuan to develop pcle 5.0 retimer chip and pcle 6.0 retimer chip. PCIe protocol has developed from PCIe 3.0 to PCIe 4.0. The transmission rate has been increased from 8gt / s to 16gt / s, to PCIe 5.0 and PCIe 6.0, and the transmission rate will be further increased to 32gt / s and 64gt / s, which can meet the rapidly growing market demand of cloud computing, AI, big data, resource pooling and so on; However, with the doubling of PCIe transmission rate, the problem of signal attenuation has become increasingly prominent. PCIe retimer chip can solve this problem and is expected to become the standard configuration of server system. Lanqi is also developing AI reasoning chip. With the technical advantages of its memory interface cache chip, it solves the pain point of massive data transmission between memory and CPU in AI operation
Profit forecast and investment suggestions
We lowered the company’s earnings per share forecast for 21-23 years to 0.73, 1.09 and 1.54 yuan (the original forecast was 0.78, 1.09 and 1.54 yuan, mainly reducing the revenue forecast of Jinchuan server platform for 21 years and raising the forecast of R & D expenses). We are optimistic about the company’s long-term space. According to the 23-year average PE valuation of comparable companies, the corresponding target price is 92.40 yuan and maintain the buy rating.
Risk tips
Server sales are less than expected; Intel CPU delay leads to ddr5 penetration less than expected; The stock price fluctuation risk of Kechuang board is high; The proportion of foreign sales volume is relatively high; Server DRAM technology architecture planning changes; The risk of valuation decline caused by poor performance.
