Will Semiconductor Co.Ltd.Shanghai(603501) (603501)
On board CIS accumulates deeply, or the mobile phone becomes the largest catalyst
If the electric vehicle is the first half, the intelligent vehicle is the second half. In terms of sensing, the core sensing component is the eye of automatic driving, and the multi-sensor fusion scheme has gradually become the mainstream. On board CIS is divided into three directions, Exterior artificial vision (look around, rear view), exterior machine vision (ADAS and autopilot) and in cabin monitoring. With the upgrading of intelligent driving from L1 to L2 / L3, the number of cameras has increased from about 5 to 8 ~ 13, and the number of on-board cameras has increased significantly. At the same time, the on-board CIS has also been gradually upgraded from VGA → 1m → 2m → 8m. The value of a single camera has gradually increased, and the increase in volume and price has led to the increase in the market scale of on-board CIS It has accumulated profound experience in the field of on-board CIS, and its forward-looking 8m pixel products are comparable to the world’s leading manufacturers. The company continues to strengthen cooperation with NVIDIA, horizon and other upstream and downstream industrial chains, so as to further enhance the company’s competitiveness in the field of on-board CIS. It can be seen from the latest information on NVIDIA’s official website that Howell’s various vehicle specification CIS products have actively participated in NVIDIA’s latest compatibility scheme, We believe that the company is expected to further increase its market share in the field of vehicle regulation CIS in the future, and taking over mobile phones has become another important catalyst for the company.
The gross profit margin of panel driven IC changes little in the short term, and the substitution is accelerated
According to our industry chain research, panel driven IC overall price or gross profit margin will not change significantly in the next 1~2 quarter. The outlook for 2022 Q2 will still be determined by the supply and demand relationship. The panel driven IC supplier in Taiwan of China will adjust the product structure accordingly according to the capacity of the panel plant. At present, the prices of large-size TV products have been adjusted due to weak demand, and the prices of small and medium-sized TV products are expected to remain high due to the continuous increase in the demand for OLED and vehicle related products. Mobile phone mobile phone long time OLED has been a major driver of IC in China. The China Mobile’s IC driver has dominated the market share in the past long period. With the breakthrough of OLED in China, the domestic OLED driving IC is expected to be matched. In smartphone TDDI, the market share of the company is dominated by the companies in China and the future will focus more on OLED and vehicle related fields. We predict that driving IC is the most critical link in the panel industry chain. After this round of shortage and price increase, the stability of supply and product reliability are the first factors considered by intelligent terminal manufacturers, and China’s leading enterprises are expected to benefit fully.
Mobile CIS high-end product series layout to strengthen market competitiveness
From the perspective of the company’s layout of mobile CIS, we have always emphasized the company’s two development strategies: on the one hand, the company continues to promote the upgrading of product pixels and accelerate the penetration into Chinese terminal brand customers. The company will release 48m pixel series products in 2019 and 64M pixel series products in 2020, constantly narrowing the gap between the company’s high-end products and global leading enterprises, It is predicted that in the future, the company is expected to launch a series of high-pixel products with more market competitive advantages based on market demand. At present, the trend of mobile phone cameras is basically established, and the number of cameras will not continue to increase. However, a single camera has pixel upgrades, especially under the trend of rear dual cameras, the company is expected to further improve the market share of high-pixel products; On the other hand, the company continued to maintain its leading edge in the field of small pixels, launched 0.7u/0.61u products with competitive advantages such as 32m / 48m / 64M / 100M, and accelerated the upgrading of front camera and rear camera.
Investment advice
We maintain the previous profit forecast. It is estimated that the company’s revenue from 2021 to 2023 will be 27 billion yuan, 35 billion yuan and 46 billion yuan respectively; The net profits attributable to shareholders of the parent company were RMB 4.607 billion, RMB 6.530 billion and RMB 8.902 billion respectively; EPS is 5.30 yuan / share, 7.51 yuan / share and 10.24 yuan / share respectively, corresponding to 57.30 times, 40.43 times and 29.65 times of PE with closing price of 303.75 yuan on December 3, 2021. Based on the growth path of overseas semiconductor leading enterprises, we believe that kuanracetrack high-quality companies gradually meet the platform development opportunities, continue to grow bigger and stronger, firmly value the company’s long-term investment value and maintain the “buy” rating.
Risk statement
The innovation of optical track is lower than expected, the shipment of intelligent terminal is lower than expected, the breakthrough of new products is lower than expected, the breakthrough of new semiconductor products is lower than expected, the customer expansion is lower than expected, and the price pressure caused by the intensification of industry competition.
