Changsha Jingjia Microelectronics Co.Ltd(300474) (300474)
Key investment points
Jm9 series chips have made rapid progress and greatly improved their performance. The company announced on November 26, 2021 that jm9 Series graphics processing chips have completed the stage of streaming, packaging and preliminary testing. In terms of performance, the chip has low power consumption. On the premise of ensuring the function, the power consumption is less than 30W, which is far lower than that of the same type of products; The general computing level and graphics rendering level are expanded from supporting OpenGL to supporting OpenGL, OpenCL, Vulkan and OpenGLES, and the pixel filling rate is greatly improved; The compatibility is greatly improved, supporting multi format video codec and multi type scene applications; Support multi platform applications, x86, arm, MIPs processors, Linux, winning Kirin, Galaxy Kirin, Tongxin software and other operating systems. The company has been deeply engaged in the field of graphic display and control for many years. The successful research and development of a new generation of GPU chip has further consolidated the company’s market competitiveness and market share, which is of great significance to promote the company’s long-term development.
Chip products extend to the field of general computing, and there is a broad space for localization and substitution. In the first half of 2021, the company’s chip product revenue reached 214 million yuan, a year-on-year increase of 1143.61%. The company’s chip products have developed from embedded graphics processing chips to high-end embedded applications and desktop applications, and continue to extend to general computing and other fields. Among them, MCU chip and audio chip are mainly used in the field of Internet of things; Jm7 series chips have been widely used in general market; Jm9 Series graphics processing chips will also be mainly used in general fields in the future, and will be applied in high-performance display and artificial intelligence computing such as geographic information system, media processing, CAD aided design, games and virtualization. Driven by the national information innovation strategy, the company, as the only enterprise in China to realize GPU independent R & D and commercial mass production, has a broad market for localization substitution.
Driven by the special market and general market, the company’s performance has entered a period of rapid growth. In the first three quarters of 2021, the company realized a receivable of RMB 813 million, a year-on-year increase of 74.50%, and the net profit attributable to the parent company was RMB 249 million, a year-on-year increase of 70%. The performance greatly exceeded the market expectation, which was mainly due to the stable growth of products in the field of small specialized radar and the accelerated application of products in the field of chips in the general field, which verified the product capability and market recognition of jm7 series chips. Benefiting from the continuous growth of military informatization demand and the rapid expansion of general market brought by the information innovation strategy, the company’s military disk business will continue to make efforts and promote the accumulation of chip business.
Investment suggestion: adjust to “overweight” rating. The company is a leader in domestic graphics display and control and GPU chips, benefiting from military informatization and information innovation strategy, with huge growth space. Due to the sharp increase in the company’s performance in the first three quarters of 2021, we raised the company’s forecast of net profit attributable to the parent company in 2021, 2022 and 2023 to RMB 1.310, 19.90 and 2.508 billion, corresponding to EPS of RMB 1.16, 1.72 and 2.32, and corresponding to current PE of 149, 100 and 75 times. However, considering that the company’s share price has increased significantly since the first quarter, we believe that the company’s performance expectation has been partially fulfilled in advance in the share price, the current valuation level is high, and the company’s rating is adjusted to “overweight”.
Risk tip: the general market demand is less than expected, the promotion of the new generation of chips is less than expected, and the market competition is intensified.
