\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 56 Shenzhen Minde Electronics Technology Ltd(300656) )
Event comments
Leading enterprises in China’s bar code recognition industry to build a semiconductor smartidm ecosystem. The company initially focused on bar code identification business and gradually developed into a leading enterprise in China. It is the first enterprise in China to independently develop bar code identification equipment and one of the few enterprises that can compete with similar foreign products. Since 2018, the company has creatively created smartidm mode, arranged the whole semiconductor industry chain, entered and developed semiconductor design and distribution business, highlighting the company’s broad development space and competitiveness in semiconductor business.
Downstream application fields have been continuously expanded, and the scale of power semiconductor market has grown steadily. With the development of downstream applications such as new energy vehicles, consumer electronics and white appliances and the expansion of new application fields, the market demand for power semiconductors has increased steadily and the scale of the industry has continued to grow. According to omdia data, it is estimated that the global power semiconductor market will reach US $55.3 billion in 2024 and the CAGR will reach 4% from 2019 to 2024. As the world’s largest consumer of power semiconductors, China’s market scale has grown steadily. According to IHS, the market size will reach US $15.9 billion in 2021 and the CAGR will reach 6.3% in 20152021.
Open up the whole industrial chain of power semiconductor and build core competitiveness with smartidm mode. From 2018 to 2021, the company successively held shares in Guangwei integration, a semiconductor design company, Jingrui electronics, a semiconductor silicon wafer company, and Guangxin microelectronics, a wafer foundry company. It is a rare company in China with influence covering the three links of silicon wafer manufacturing, wafer production and semiconductor design. The company’s unique smartidm mode enables upstream and downstream companies in the industrial chain to cooperate closely and have their own relatively independent advantages. While realizing the security and stability of the supply chain and greatly improving the efficiency of the industrial chain, it also retains the development planning and full market competition awareness of each company, and improves the core competitiveness of the company.
The electronic component distribution industry expanded, and the company developed new energy power and energy storage battery business. The complexity of electronic components makes the upstream and downstream enterprises have an increasing demand for distribution and its derivative services. The rapid development of automotive electronics and cloud storage in downstream industries is an important driving force for the expansion of the distribution market of electronic components. Taibo xunrui, a wholly-owned subsidiary of the company, distributes a variety of products, widely develops downstream customers, and develops new energy power and energy storage battery business, with a positive development trend.
Deeply cultivate the bar code identification industry and technological upgrading to help the company stabilize its leading position. The bar code recognition industry is the front-end information import layer of the Internet of things. It grows with the growth of downstream application fields such as the Internet of things and o2o, and the development prospect is optimistic. At present, the company’s bar code identification equipment is widely used in the field of information management and logistics automation products in retail, logistics, warehousing, medical and health, industrial manufacturing, e-commerce and other industries. The company constantly updates iterative technology, and some technical performance has reached and approached the level of international leading enterprises. Combined with its high-quality marketing network and customer resources, the company is firmly in the leading position.
Investment advice
In the future, the company will build a dual industry growth curve around the development strategy of “deeply cultivating bar code recognition and focusing on power semiconductors”. Bar code identification business will contribute to stable cash flow and assume the responsibility of “cash cow” in the development of the company. In terms of power semiconductor business, the company will open up the core industrial chain of power semiconductor with smartidm mode. With the gradual expansion of the company’s production capacity and the gradual enrichment of product series, it will become the main contribution point of the company’s performance increment in the future. It is estimated that the operating revenue of the company from 2021 to 2023 will be 507 / 631 / 1570 million yuan respectively, with a year-on-year increase of 25.81% / 24.33% / 148.92% respectively. The net profit attributable to the parent company was 77 / 116 / 286 million yuan respectively, with a year-on-year increase of 48.40% / 51.77% / 145.68% respectively. EPS is 0.59/0.89/2.18 yuan respectively. The current share price (closing price of 42.36 yuan on March 7, 2022) corresponds to 72 / 48 / 19 times of PE respectively. It is covered for the first time. With reference to the valuation of comparable companies, the company is rated as “strongly recommended”.
Risk tips
The demand of semiconductor industry is lower than expected; The company’s product R & D progress is less than expected; Risks caused by intensified industry competition.
