Gigadevice Semiconductor (Beijing) Inc(603986) (603986)
The performance of leading enterprises in memory chips and MCU continues to grow at a high speed
The company is a leading enterprise in the design of memory chips and MCU chips in China. It was established in 2005. Its main business is the R & D, technical support and sales of memory, microcontrollers and sensors. Its products are widely used in handheld mobile terminals such as mobile phones and tablets, consumer electronic products, Internet of things terminals, personal computers and peripherals, industrial control equipment, automotive electronics, communication equipment Medical equipment, office equipment and other fields. Benefiting from the strong demand in downstream application fields and the significant localization trend of supply chain, the company has met the diversified needs of customers with high-quality and reliable products and services by virtue of perfect product line layout, strong R & D strength and brand influence accumulated in the market for many years, achieved rapid growth in performance, and achieved an operating revenue of 6.33 billion yuan in the first three quarters of 2021, A year-on-year increase of 99.45% and a net profit attributable to the parent company of RMB 1.648 billion, a year-on-year increase of 144.92%.
In the digital age, the storage demand is growing explosively, and vehicle storage will be the growth point of emerging markets in the future
With the rapid development of 5g communication, Internet of things, artificial intelligence, automatic driving and other fields, the rise of new terminal equipment, such as 5g base station, smart home, ADAS system and the increase of data storage, the application demand of memory chip will also show a continuous growth trend. According to icinsights, the global market scale of memory chips will reach US $155.2 billion, US $180.4 billion and US $219.6 billion from 2021 to 2023, with an increase of 22.5%, 16.2% and 21.7% respectively. In the Chinese market, with the continuous improvement of China’s level in the field of electronic manufacturing, the demand for Chinese memory chip products is gradually rising. According to the data of the World Semiconductor Trade Statistics Association, it is expected that the scale of China’s memory chip market will reach 649.2 billion yuan in 2023. In the post mobile computing era, vehicle storage will be the growth point of emerging markets in the future. As the calculation becomes faster and faster, the matching storage must be larger and larger. Generally speaking, the arrival of automatic driving has spawned the demand for greater storage capacity. According to IHS data, the global automotive storage IC market will reach US $3.6 billion in 2019 and is expected to grow to US $8.3 billion by 2025.
MCU has a wide range of application scenarios, benefiting from the rapid development of automotive intelligence
MCU The application field of (microcontroller) covers almost all scenarios requiring controllers. According to the data of icinsights, the global MCU product shipment increased from 22.1 billion in 2015 to 36.1 billion in 2020, and the market scale increased from $15.9 billion in 2015 to $20.7 billion in 2020. The forward looking Industry Research Institute predicts that the global MCU market scale will increase to $28.5 billion in 2026, including Chinese MCU The market scale will reach 51.3 billion yuan. In the process of automotive intelligence, MCU will play a relatively important role in a wide range of applications, including body control, instrument panel On board information and entertainment system (IVI), communication system, advanced security system, ADAS automatic driving, as small as window control, electric seat, reversing radar and key, all need MCU to control. At present, the number of MCU on an electric vehicle can reach dozens, and there may be hundreds in the future. According to IHS data, it is expected that the global automotive MCU market will reach US $8.9 billion in 2025.
The business layout is comprehensive and three arrows are launched simultaneously to create long-term growth
The company focuses on sensing (sensor), memory (flash, DRAM and new memory), computing (Computing), control (MCU Ecology), and connectivity (connection field) continuously improve and enrich the product line. In terms of flash products, the company can provide a diversified product portfolio with high performance, large capacity, low power consumption, small size and other applications in many fields. In the automotive application field, the company’s 2G large capacity products of GD55 have passed the vehicle specification aecq-100 certification, the 2mb-2gb capacity of spinorflash vehicle specification products has been fully paved, and the gd25 vehicle specification storage system is complete The listed products have been adopted in batches in many automobile enterprises. In terms of DRAM products, the company mass produced its first private brand 19nm4gbddr4 product for niche market in June 2021, which has passed the certification of many mainstream platforms in the field of consumer applications. At present, 17nm DDR3 products are actively being developed. At the same time, the company cooperates closely with Changxin storage to provide stable production capacity guarantee for the company’s DRAM products. In the future, DRAM products will become a new revenue contribution point of the company. In terms of MCU products, as a leading 32bitmcu manufacturer in China, the company has successfully mass produced 28 general MCU series, which can provide rich functions and capacity options such as entry-level, mainstream and high performance. The company’s MCU products are steadily entering the vehicle specification market. At present, the first vehicle specification level MCU product has been released and is expected to achieve mass production in 2022. We believe that the layout of the company’s three major product lines is comprehensive and reaches the leading level in China. In the future, with the continuous iterative upgrading of products, the company will achieve three arrows at the same time under the era of domestic substitution, and the long-term growth path is clear.
Profit forecast
It is predicted that the company’s revenue from 2021 to 2023 will be RMB 10.116 billion, RMB 14.447 billion and RMB 18.141 billion respectively, and EPS will be RMB 3.84, RMB 5.63 and RMB 6.95 respectively. The corresponding PE of the current stock price will be 43, 29 and 24 times respectively, and the company will be given a “recommended” investment rating.
Risk statement
The risk of industry cyclical fluctuation, the risk that the R & D and promotion of new products are less than expected, the risk of insufficient supply of supply chain capacity, etc.
