\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 460 Hangzhou Silan Microelectronics Co.Ltd(600460) )
Event: on March 10, the company issued the announcement on the investment progress of Shilan Jike 12 inch chip production line; The company held the first extraordinary general meeting of shareholders in 2022. The meeting deliberated and approved the proposal on jointly increasing capital and signing agreements and related party transactions with large fund phase II. It plans to jointly increase 885 million capital to Shilan Jike with large fund phase II. After the capital increase is completed, the shareholding ratio of large fund to Shilan Jike is 14.66%, The shareholding ratio of Hangzhou Silan Microelectronics Co.Ltd(600460) was increased from 15% to 18.72%.
The company began to make a forward-looking layout of the 12 inch production line in 2017. By the end of 2021, it has achieved the goal of 40000 pieces per month for the phase I project, and strive to achieve the goal of 60000 pieces per month in the fourth quarter of 2022. This capital increase is conducive to accelerating the construction and operation of the 12 inch production line and actively promoting the improvement of production capacity; The phase II project will help the company further upgrade its products, and the company will continue to promote the amount of power chips and circuits that meet the requirements of vehicle regulations on the 12 inch line; We are optimistic about the company’s capacity + product structure optimization, which is expected to accelerate the development of the company.
With a forward-looking layout of the 12 inch production line, the capital increase of the company and large funds is expected to accelerate the release. In 2017, the company began to prospectively layout the 12 inch production line and signed the investment cooperation agreement on the 12 inch integrated circuit manufacturing production line project with Xiamen semiconductor. The two sides jointly invested and established Xiamen Shilan Jike Microelectronics Co., Ltd. to plan and build two 12 inch lines. The total investment of the first 12 inch line is 7 billion yuan, of which the total investment of phase I is 5 billion yuan, realizing a monthly production capacity of 40000 pieces; The total investment of phase II is 2 billion yuan, with a new monthly production capacity of 40000 pieces. By the end of 2021, Shilan Jike has achieved the target of 40000 chips per month in the first phase of the project. The chip output reached 36000 in December, and more than 200000 chips were output in 2021. In May 2021, Shilan Jike launched the first 12 inch line, striving to form a production capacity target of 60000 pieces per month in the fourth quarter of 2022. The capital increase aims to further increase the capital adequacy ratio of Shilan Jike, accelerate the construction and operation of 12 inch integrated circuit chip production line, and actively promote the production capacity of Shilan Jike.
Phase II project promotes product upgrading and continues to promote the quantity of vehicle regulated products. At present, Shilan Jike’s 12 inch line products include trench gate low-voltage MOS, trench separation gate sgt-mos, high-voltage superjunction MOS, trench Schottky, IGBT, high-voltage integrated circuit, etc. with the acceleration of the construction progress of the company’s phase II project, the company will continue to promote the quantity of power chips and circuits meeting the requirements of vehicle regulations on the 12 inch line. At present, the supply shortage of automotive chips continues. According to autoforecast solutions, the chip shortage will lead to a reduction of 643100 vehicles in the world and about 51100 vehicles in the Chinese market, accounting for about 8%. In addition to the lack of chip supply worldwide, the low localization rate of vehicle specification chips and the long-term high dependence of local car enterprises on chip imports are also one of the important factors that exacerbate the impact of the chip crisis on Chinese car enterprises. Data show that China’s automotive semiconductor output value accounts for less than 5% of the world, and the import of some key parts accounts for more than 80% to 90%. With the accelerated construction progress of phase II project, the 12 inch line process and product platform of Shilan Jike will be further improved. The company will continue to promote the amount of power chips and circuits that meet the requirements of vehicle regulations on the 12 inch line, which is expected to occupy an advantage.
Investment suggestion: the company continues to give full play to the advantages of IDM mode, and the release of production capacity and the optimization of product structure drive the continuous growth of the company’s performance. We expect the net profit attributable to the parent company from 2021 to 2023 to be 1.456 billion yuan, 1.577 billion yuan and 2.009 billion yuan respectively. According to the consistent prediction of wind, with reference to the 22-year average PE of comparable companies, it is conservatively estimated that 65 times will be given to the company, with a corresponding market value of 102505 billion yuan and a corresponding price of 72.39 yuan / share, maintaining the buy rating.
Risk warning: the downstream application demand is less than the expected risk, the new product development is less than the expected risk, and the supply chain risk.
