Wuxi Nce Power Co.Ltd(605111) (605111)
[matters]
In November 2021, Wuxi Nce Power Co.Ltd(605111) issued an announcement on the fixed increase plan, which plans to raise 1.45 billion yuan, The raised investment projects include: 1) R & D and industrialization of the third generation semiconductor SiC / GaN power devices and packaging test (the proposed raised fund is 200 million yuan and the construction period is 2 years), 2) R & D and industrialization of power drive IC and intelligent power module (IPM) (the proposed raised fund is 600 million yuan and the construction period is 3 years), 3) R & D and industrialization of SiC / IGBT / MOSFET and other power integration modules (including vehicle specification level) (it is proposed to raise 500 million yuan and the construction period is 3 years).
The company issued a stock incentive plan (Draft), the number of shares to be encouraged is 1417000, accounting for 1%, the grant price is 84.25 yuan / share, 142 people are to be encouraged, and the performance assessment target is that the revenue from 21 to 23 years will not be less than 14 / 16 / 18 billion yuan respectively. The incentive objects include 6 senior executives and 136 core technical and business personnel. We believe that equity incentive will help bind core employees and ensure the future operation of the company.
[comment]
Seize the market opportunity of wide band gap semiconductor power devices, optimize product structure and enhance strength. As a typical third-generation semiconductor material, SiC / GaN has irreplaceable advantages in high-end applications, or will become the future growth point of the industry. According to the white paper on the application development and investment value of the third generation semiconductor under the “new infrastructure” in 2020, the market scale of China’s third generation semiconductor in 2019 is RMB 9.42 billion, which is expected to increase to RMB 62.34 billion in 2022, and the CAGR is expected to exceed 85% from 2019 to 2022. Wuxi Nce Power Co.Ltd(605111) has developed a number of core technologies of SiC wide band gap semiconductor power devices and completed a number of GaN semiconductor power device wafer experimental wafers. The accumulation of existing MOS and IGBT silicon-based power device technologies and processes can lay a certain foundation for the company’s R & D in the third generation semiconductor field. Following the trend, the company raised funds to lay out the third generation semiconductor, which is expected to optimize and upgrade the product structure and enhance its competitiveness in the high-end application field of power devices.
Horizontal market development, coordinated development of power drive IC, IPM and power device main industry. Power drive IC is the front stage IC of driving control switch and the bridge between MCU and power switching device. The IPM module will power devices (IGBT or MOS chips), power drive IC and a small number of passive components are pasted and sealed together to meet the requirements of white electricity, industrial motors and other fields. On July 1, 2020, the implementation of the new national standard for air conditioning is expected to promote the growth of frequency converter market scale, which will be 49.5 billion yuan in 2019 and 88.3 billion yuan in 2025, driving strong demand for IPM modules, and some customers of the company who use IPM modules, Interested in domestic substitution. The main application fields of power drive IC have a high degree of coincidence with the customers of the company’s existing power devices, which can better ensure the sales of related products and is expected to increase revenue.
[investment advice]
The company focuses on the R & D and sales of power semiconductor power devices. We expect that the company’s revenue from 2021 to 2023 will be RMB 1.57/2.04/2.59 billion, the net profit attributable to the parent company will be RMB 4.1/5.0/630 million, the EPS will be RMB 2.87/3.56/4.45, and the PE corresponding to the current stock price will be 75.86/61.20/48.95 times, giving the company a “overweight” rating.
[risk tips]
The industry competition intensifies, the prosperity of power semiconductors decreases, and the expansion of production capacity is less than expected.
