Unigroup Guoxin Microelectronics Co.Ltd(002049) (002049)
Key investment points
It is mainly engaged in special integrated circuits and intelligent security chips, with a compound growth rate of 15% / 52% in revenue / net profit in recent three years
China microelectronics: a wholly-owned subsidiary, mainly engaged in special integrated circuits, with a revenue of 1.4 billion in 2021h1, accounting for 60%, a net profit of 800 million and a net interest rate of 56%. The compound growth rate of revenue / profit in recent three years is 65% / 88% respectively
Ziguang Tongxin: a wholly-owned subsidiary, mainly engaged in intelligent security chips, with a revenue of 800 million in 2021h1, accounting for 34%, a net profit of 40 million and a net interest rate of 6%. The compound growth rate of revenue / profit in recent three years is 11% / 0% respectively;
Other businesses: Civil high-performance programmable devices (Ziguang Tongchuang), semiconductor power devices (Wuxi Ziguang microelectronics, a subsidiary) and quartz crystal components (Tangshan Guoxin, a subsidiary).
Microelectronics in China: the leader of special integrated circuits. It is expected that the compound growth rate of revenue / profit in the next three years will be 43% / 53%
Products: it covers nearly 500 varieties of seven series, including high-performance microprocessors, high-performance programmable devices, storage devices, bus devices, network buses and interfaces, simulator devices, SOPC system devices and custom chips. The application of special integrated circuits is the key to the intellectualization and miniaturization of modern weapons and equipment;
Status: China’s leader in special integrated circuits, products are widely used in aircraft, missiles, ships, vehicles and other scenes;
Market scale: benefiting from “increased import substitution rate + category expansion + increased proportion of national defense equipment informatization + large volume of downstream mounted models + increased market share”, it is expected that the annual growth rate of Chinese military informatization equipment will be about 15%, and the proportion of electronic systems will continue to expand. The company will maintain its high market share in the existing field, and its strong R & D strength will support the rapid expansion of product categories, Considering the company’s production capacity and orders on hand, it is estimated that the revenue in the next three years will be RMB 2.8/42/5.9 billion respectively, with a year-on-year increase of 68 / 50 / 40% and a compound growth rate of 45%.
Ziguang same core: high-end intelligent security chip. It is expected that the compound growth rate of revenue / profit in the next three years will be 22% / 19%
Products: smart card security chip and terminal security chip, providing terminal products and solutions based on security chip for customers in communication, finance, industry, automobile, Internet and other fields;
Position: smart card chip is the second largest manufacturer in China (market share: 11%), and high R & D investment will support the company to continue to develop downstream application markets such as vehicle, Internet of things and 5g in the future;
Market scale: benefiting from the rapid growth of demand for “Internet of things terminal + 5g communication + improvement of domestic substitution rate”, the market share of the company’s traditional business of social security card and ID card is stable / the financial card business is growing synchronously with the downstream / the overseas business continues to expand / the involvement of vehicle 5g and other emerging fields, the company’s revenue is expected to be 1.8/23/2.8 billion in the next three years, with a compound growth rate of 25%.
Profit forecast and valuation
It is estimated that the net profit from 2021 to 2023 will be RMB 1.60/2.45/3.22 billion, with growth rates of 99% / 53% / 31% respectively, compound growth rate of 58%, pe79 / 52 / 39 times. It is covered for the first time and given a buy rating.
Risk statement
The risk that the new equipment model cannot be successfully bid in time; The risk that the wafer foundry has tight production capacity and the products cannot be shipped in time; The demand for electronic informatization of national defense equipment is not urgent, and the growth of special integrated circuits is less than expected.
