Shanghai Awinic Technology Co.Ltd(688798) (688798)
Core view
The prosperity of analog chips continued and the company's Q3 performance increased. From January to September 2021, the company realized a revenue of 1.661 billion yuan, a year-on-year increase of + 71.36%; The net profit attributable to the parent company was 196 million yuan, a year-on-year increase of + 144.87%. In 2021q3, the single quarter revenue was 595 million yuan, a year-on-year increase of + 28.91%; The net profit attributable to the parent company was 74 million yuan, a year-on-year increase of + 137.09%.
Benefiting from the increase of new product sales and price, the profitability of the company has been greatly improved. From January to September 2021, the company's gross profit margin was 39.22%, a year-on-year increase of + 4.58pct; The net interest rate was 11.77%, a year-on-year increase of + 3.53pct. The company actively transmitted the price increase of upstream wafer foundry and packaging test to the downstream, and the sales volume and price of new products increased, driving the gross profit margin to increase significantly. In terms of period expense rate, the company's management expense rate from January to September 2021 is 5.74%; The sales expense rate is 4.51%; The financial expense rate is 0.01%.
High level R & D investment and continuous enrichment of product item numbers. From January to September 2021, the company's R & D expenses were 262 million yuan, a year-on-year increase of + 98.48%; The R & D expense ratio was 15.78%, with a year-on-year increase of + 2.14pct. The company actively reserves talents to prepare for future industrial and automobile expansion and continuously enrich product item numbers. In the short term, there is still huge space for consumer electronics. The company reserves technology in advance, completes product serialization, and continues to expand the fields of industry, IOT and automotive electronics.
The company is mainly engaged in digital analog mixed signal, analog and RF chips, and multi product line layout. The products include audio power amplifier chip, power management chip, RF front-end chip, motor drive chip, etc. the product model reaches more than 470. In 2020, the company's product sales are about 3.2 billion, which are widely used in smart phones, smart watches, Bluetooth headsets, tablets, laptops, IOT modules, smart speakers and other intelligent hardware.
Downstream applications take mobile phones as the core and continue to expand the field of Internet of things and IOT. The company's products take the new intelligent hardware represented by smart phones as the application core, and the mobile phone market revenue accounts for more than 85%. Customers include Huawei, Xiaomi, oppo, vivo, voice transmission, TCL, Lenovo and other well-known mobile phone manufacturers, as well as Huaqin, Wingtech Technology Co.Ltd(600745) , Longqi technology and other well-known ODM manufacturers; In the subdivided fields such as wearable devices, intelligent portable devices and Internet of things devices, we have continuously expanded the well-known enterprises in the subdivided fields.
Profit forecast: we expect the net profit attributable to the parent company in 2021, 2022 and 2023 to be RMB 250, 421 and 618 million respectively, corresponding to 155 / 92 / 63 times of the share price PE on November 30. It is covered for the first time and given a "buy" rating.
Risk warning: R & D is less than expected, downstream demand is less than expected, and market competition is intensified.
