China Resources Microelectronics Limited(688396) (688396)
1、 Event overview
On December 25, the company issued the restricted stock incentive plan (Draft) for 2021, which plans to issue no more than 15.07 million additional shares, accounting for 1.14% of the total share capital of the company, of which the first grant amount accounts for 80%, the reserved amount accounts for 20%, and the first grant price is 34.10 yuan / share.
2、 Analysis and judgment
Wide employee coverage & define performance assessment objectives to help future growth
We believe that the stock incentive plan has the following highlights: 1) it has a wide range of employees, and the granted objects reach 1300, including directors and senior executives, core management, technology and operation personnel, accounting for 12.1% of the total number of employees. Due to the large number of production employees in the company, if the production employees are excluded, the incentive proportion reaches 51%; 2) Clarify performance assessment objectives and help future growth. The company has set performance assessment targets of not less than 7.2% / 7.3% / 7.4% roe in 2022 / 23 / 24, not less than 25% / 26% / 27% growth of net profit attributable to parent company compared with the average annual value of RMB 598 million in 2018-2020, and not less than 6.15/6.2/6.25 turnover rate of accounts receivable respectively. 3) Mobilize employees’ work enthusiasm. This stock incentive plan helps to further establish and improve the company’s long-term incentive mechanism, attract and retain excellent talents, combine the interests of shareholders, the company and the personal interests of the core team, and fully mobilize the enthusiasm of the core team of the company.
New production capacity is put into operation to ensure growth, and IGBT & SiC is making rapid progress
The company is one of the largest power semiconductor manufacturers in China. With the production capacity of 12 inch wafer manufacturing and packaging test in Chongqing next year, it will effectively ensure the company’s future production capacity growth. In terms of IGBT, the company’s IGBT revenue in the first November increased by 70% year-on-year. Single pipe and modules have achieved large-scale sales. The downstream fields cover new energy, industrial control, automotive electronics, consumption and other fields. With the large capacity and technological progress, it is expected to achieve further breakthroughs next year. In terms of third-generation semiconductors, on December 17, the company released new sicmos products, which are mainly used in high-power fields such as new energy vehicles, industrial power supply and photovoltaic wind power, so as to achieve a rapid breakthrough in the field of third-generation semiconductors.
3、 Investment advice
We expect the net profit attributable to the parent company to be RMB 2.5/29/3.2 billion in 2021, 2022 and 2023, corresponding to 34 / 29 / 26 times of PE. At present, the PE of Shenwan semiconductor index is 62 times. Considering the company’s future capacity expansion and rapid progress of new products, it maintains the “recommended” rating.
4、 Risk tips:
The industry boom is less than expected, the R & D progress is less than expected, and the production capacity climb is less than expected.
