Gigadevice Semiconductor (Beijing) Inc(603986) (603986)
Conclusions and recommendations:
Driven by the market demand of TWS earphones, AMOLED panels and tddi, the demand of norflash industry will continue to grow in 2021, while the relay of demand for automotive electronics and communication is expected to further drive the prosperity of the industry in 2022. At the same time, based on the judgment that the capital expenditure of global data centers will increase in 2022, especially the expenditure of super large-scale data centers will surge by 30%, we expect that the price decline of DRAM is expected to narrow, and the overall storage industry fundamentals will improve in 2022. As a leading nor flash enterprise in China, the company has accelerated its expansion to the fields of MCU, NAND, DRAM and sensors, and its rich product portfolio gives the company more room for growth. It is estimated that the net profit of the company in 2021 and 2022 will be 2.29 billion yuan and 2.81 billion yuan, yoy will increase by 160% and 23% respectively, and EPS will be 3.44 yuan and 4.22 yuan respectively. At present, the stock price corresponds to 40 times of Pe2 in 2022. The company, as the storage target of A-share scarcity, gives a buy rating.
The NOR flash boom is running at a high level, and the overall storage is basically good: thanks to the pull of the market demand of TWS headphones, AMOLED panels and tddi, the demand of the NOR flash industry will continue to grow in 2021, while the relay of automotive electronics and communication demand is expected to further drive the boom of the industry in 2022. At the same time, based on the judgment that the capital expenditure of the global data center will increase in 2022, especially the expenditure of super large-scale data center will increase by 30%, we expect that the drop in DRAM price is expected to narrow, and niche DRAM products will benefit from the increased demand of domestic import and security industries. The overall storage is basically good, which is conducive to the sustainable growth of the company's DRAM business.
3q21 performance increased significantly: in the first three quarters of 2021, the company achieved a revenue of 6.33 billion yuan, and yoy increased by 99.4%; The net profit was RMB 1.65 billion, yoy increased by 144.9% and eps2.5% Five yuan. Thanks to the continuous improvement of the industry boom, the company's storage chip business revenue increased by 63.7% year-on-year in the third quarter; MCU revenue increased by 222% year-on-year, jointly driving the company to achieve revenue of RMB 2.69 billion in a single quarter in the third quarter, yoy increased by 77.4%, net profit of RMB 860 million and yoy increased by 178.5%. In terms of profitability, the gross profit margin of 3q21 company increased by 9 percentage points to 49.8% compared with the same period of last year, which is a high point in recent years, driving the comprehensive gross profit margin of the company to 44.3% in the first three quarters, an increase of 3.6 percentage points compared with the same period of last year. In addition, the company's period expense rate was 16.1%, a decrease of 4.9 percentage points compared with the same period of last year. The above factors jointly promoted the substantial growth of the company's performance.
Profit forecast: Based on the judgment that the DRAM revenue of the company will increase significantly in 2022 but the gross profit margin of the company will be reduced structurally, the annual profit forecast of 2022 will be revised down by 4%. It is estimated that the net profit of the company in 2021 and 2022 will be 2.29 billion yuan and 2.81 billion yuan, yoy will increase by 160% and 23% respectively, and EPS will be 3.44 yuan and 4.22 yuan respectively. The current stock price corresponds to 40 times of Pe2 in 2022. The company is regarded as the storage target of A-share scarcity, Give a buy rating.
Risk tip: covid-19 epidemic has dragged down the growth of consumer electronics demand.
