Montage Technology Co.Ltd(688008) (688008)
The CPU of Tianjin capture platform starts quickly. In April 2021, LanChi’s third-generation Jinchuan CPU was mass produced and put on the market. Jinchuan products received positive responses from many domestic server manufacturers, such as Xinhua III, Lenovo, Baode and great wall, which have launched server products supporting Jinchuan CPU. Jinchuan platform has been applied to government affairs, transportation, finance and other fields. According to the company’s announcement, the company’s connected transaction volume between Jinchuan server platform and Intel in 2021 will not exceed RMB 100 million, RMB 500 million and RMB 1.5 billion, up to RMB 1.584 billion. In addition, the company expects the transaction volume of RMB 2.5 billion in 2022, indicating the company’s confidence in the future development of this business.
The server market has fully warmed up. Xinhua’s revenue in October 21 was 356 million new Taiwan dollars, an increase of 89% year-on-year and 16% month on month; Rambus21q3 memory interface chip revenue was US $37 million, with a year-on-year increase of 23% and a month on month increase of 18%; Rambus expects 21q4 to grow 34% – 54% year-on-year and 28% – 47% month on month.
Ddr5 curtain opened, Montage Technology Co.Ltd(688008) ddr5 has been officially shipped, the server and PCNB markets have been fully opened, and the memory interface and supporting chips have been in full volume. Memory technology has been developed to ddr5 generation, and Intel’s official guidelines will release the next generation of server CPU in 2022. Memory module manufacturers will enter the stage of mass production ramp up, goods preparation and procurement of CPU platform 1-2 quarters in advance. Therefore, as a leading memory interface chipset supplier in the industry and an active contributor to JEDEC memory standard, Montage Technology Co.Ltd(688008) ddr5 related chips began to scale in October 2021 and officially entered the ddr5 stage.
Four recent changes: 21q3 inflection point, large repurchase, increased holdings of senior executives and ddr5 mass production. (1) 21q3’s revenue was 870 million yuan, a year-on-year increase of 129% and a month on month increase of 104%; deducting non net profit of 183 million yuan, a year-on-year increase of 13% and a month on month increase of 77%) (2) the increase in holdings at the bottom showed confidence: Montage Technology Co.Ltd(688008) it is planned to repurchase the company’s shares with its own funds of 300-600 million yuan, and the repurchase price shall not exceed 86 yuan / share (20% premium over the current price of 73 yuan / share). (3) The increase of senior executives’ holdings shows confidence: the chairman and CEO and the director and general manager jointly increased their holdings by about 20 million yuan. (4) on October 29, 2021, Montage Technology Co.Ltd(688008) announced that its ddr5 first generation memory interface and module supporting chips have been successfully mass produced.
Profit forecast, valuation and rating: actively grasp the bottom platform leader, and the short, medium and long-term product logic is clear. Montage Technology Co.Ltd(688008) is the first memory interface chip segment in the world and an enterprise with global competitiveness in China. It is an international leading data processing and interconnection chip design company. It is committed to becoming a platform enterprise in computing, storage and interconnection related fields in server and data center fields. In the future, the company’s memory interface chip business is expected to deeply benefit from the large volume of ddr5 memory interface chips and supporting chips; At the same time, we are optimistic about the domestic alternative space of the company’s Tianjin capture server platform and the large volume of PCIe retimer chips. We maintain the company’s net profit attributable to the parent company from 2021 to 2023 as 803 million yuan, 1232 million yuan and 1.775 billion yuan, Montage Technology Co.Ltd(688008) the current market value of 82.6 billion yuan corresponds to 103x, 67x and 47x PE in 21-23 years respectively. We maintain the “buy” rating.
Risk tip: ddr5 progress is less than expected, and technology research and development is less than expected.
