Starpower Semiconductor Ltd(603290) (603290)
Company view update
There is still room to improve the market share of the company’s industrial control business, which is expected to pass through the impact of the economic cycle. According to our tracking, the company’s on-board business maintains ultra-high growth, PV starts domestic substitution, and SiC module is on the eve of the outbreak. Investors are continuously advised to actively pay attention to its investment opportunities:
1. The margin of capacity tension eased, and the downstream demand maintained a high growth: the revenue in the first three quarters was 1.197 billion, a year-on-year increase of + 79%; The net profit attributable to the parent company in the first three quarters was 267 million, a year-on-year increase of + 98.7%; In the first three quarters of this year, the revenue and profit of the company maintained rapid growth, and the revenue and profit growth was completed under the condition of lack of capacity in the whole semiconductor industry and continuous increase in the price of upstream OEM. Looking forward to the next year, it is expected that the margin of capacity tension in the industry will be alleviated, and the company will fully benefit from downstream new energy vehicles, photovoltaic, energy storage Business opportunities brought by the growth of demand in charging pile and other fields;
2. The market share of industrial control IGBT has been increasing: in the first half of the year, the operating revenue of industrial control and power supply industry of star was 500 million yuan, an increase of 52.06% over the same period of last year; The revenue growth is significantly higher than the overall growth rate of the industrial control industry. We expect the annual industrial control revenue to exceed 1 billion yuan, accounting for 15% – 20% of China’s industrial control demand. As the basic business of star, the company’s industrial control business has a solid leading position, and the industrial control IGBT will maintain steady growth in the future;
3. The supporting quantity of new energy vehicles continued to exceed expectations, and the proportion of on-board IGBT continued to increase: in the first half of the year, the company’s operating revenue of new energy vehicle industry was 183 million yuan, an increase of 162.92% over the same period of the previous year. In the first half of the year, the supporting quantity of vehicle specification level IGBT modules totaled more than 200000 new energy vehicles, and it is expected that the supporting quantity will further increase in the second half of the year; The sixth generation 1200vigbt chip realizes mass production on the 12 inch production line; The seventh generation vehicle specification level 650V / 750vigbt chip has been successfully developed, and it is expected to start mass supply in 2022; We expect that the number of supporting new energy vehicles this year will be close to 500000, which will double on the basis of last year’s revenue, and the revenue of on-board IGBT will account for nearly 30%;
4. Photovoltaic / energy storage IGBT is expected to usher in the turning point of domestic substitution and increase its volume quickly: the company uses modules and discrete devices of independent IGBT chips to start mass installation and application in mainstream photovoltaic inverter customers in China. It is expected to open the prelude to domestic substitution of photovoltaic IGBT with billions of yuan in China next year and contribute a large revenue;
5. Others: vehicle specification level sgtmos field: the company’s vehicle specification level sgtmosfet (split gateway MOSFET) began to supply in small quantities; SiC module: increasing supply;
6. As the leading IGBT manufacturer, under the background of tight production capacity, compared with weaker manufacturers, the production capacity side is more guaranteed. Since the third quarter of last year, the company has maintained a relatively large growth in the number of streamers at important suppliers, and the IGBT on the 12 inch line has been mass produced. The company continues to exceed expectations in the fields of vehicle supporting and photovoltaic progress; Looking at the extension, the company also plans to increase the code making end, so as to lay the foundation for the long-term and stable development of the company. In the next year and the following, the production capacity tension will be relieved, while the demand for IGBT from downstream new energy vehicles, photovoltaic, energy storage, charging piles and industrial control is increasing rapidly. As the industry leader, the company has high growth certainty. It is recommended that investors pay attention to the investment opportunities brought by valuation switching at the end of the year.
Investment advice
We believe that in the long-term perspective Starpower Semiconductor Ltd(603290) in the next five years, the benefit industry space will grow (on the order of two) * the market share will increase (on the order of five) * the proportion of self-made chips will increase / the scale effect will increase the net interest rate, which corresponds to more than 10 times of the revenue and profit growth potential. After the path of SiC devices replicating IGBT modules before chips is opened from 2025 to 2030, the growth logic will continue from 5 years to more than 10 years.
It is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 1.676 billion, RMB 2.653 billion and RMB 3.678 billion respectively, and the net profit attributable to the parent company will be RMB 336 million, RMB 570 million and RMB 791 million respectively, corresponding to 187 times, 118 times and 85 times of the current PE respectively; Maintain buy rating.
Risk statement
The development of new energy vehicles is less than expected; Macroeconomic downturn; SiC R & D projects were not as expected.
