\u3000\u3 Bohai Water Industry Co.Ltd(000605) 358 Hangzhou Lion Electronics Co.Ltd(605358) )
Event: the company issued the 2021 annual report. In 2021, the company realized an operating revenue of 2.541 billion yuan, a year-on-year increase of 69.17%; The net profit attributable to the parent company was 600 million yuan, a year-on-year increase of 197.24%; The non net profit deducted was 584 million yuan, a year-on-year increase of 288.83%.
The company disclosed the operating data from January to February 2022. After preliminary accounting, the company achieved an operating revenue of about 458 million yuan, an increase of about 84% year-on-year; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was about 131 million yuan, with a year-on-year increase of about 253%, mainly due to the continuous improvement of the atmosphere of the industry and market, the company’s full sales orders, the release of production capacity and the significant increase in the production and sales of main products. Comments: silicon chip + discrete device + RF chip, three wheel drive is expected in the future. The reasons for the company’s outstanding performance growth in 2021 include: 1) the company laid out earlier and completed the construction of new production lines of 6, 8 and 12 inch silicon wafers, and implemented the capacity and technical transformation and improvement of power device chip manufacturing production line, which fully met the current hot market demand, and all production lines of the company operated at full capacity. 2) Continue to strengthen the development of new products and technologies, continue to promote the development of high-quality customers, increase cooperation with strategic customers, and further optimize the product structure. 3) Through management improvement and lean production, remarkable achievements have been made in technical improvement, yield improvement and cost control and saving, effectively improving production capacity and quality, reducing costs and enhancing the profitability of the company; 4) According to the market supply and demand situation and the change of purchase cost of raw and auxiliary materials, the company timely increases the product price.
The capital expenditure of the company is expected to be 3.813 billion yuan in 2022, and the key areas include: 1) semiconductor silicon wafer – successfully realize the production of the newly expanded production line of 6-inch silicon wafer, 8-inch silicon wafer and 12 inch silicon wafer in Quzhou base, and accelerate the completion of the phase II project of 6-inch silicon wafer and 12 inch silicon wafer production line; Complete the M & A of Guojing semiconductor, give play to its capacity advantage of 12 inch light doped silicon wafer, go hand in hand with Quzhou base, and comprehensively accelerate the localization and industrialization of 12 inch silicon wafer. 2) Semiconductor power devices – increase the production capacity of semiconductor power devices to the maximum through internal potential tapping and technological transformation; Continue to focus on improving the production capacity and market share of trench products, and further consolidate and strengthen the company’s leading position in the global photovoltaic chip market; Develop new products, deepen the vehicle gauge chip business, and continue to improve the proportion of high-end customers’ products of general power supply. 3) Compound semiconductor RF chip – successfully completed the scheduled shipment and sales task of the whole year, and started the phase I construction project of Haining compound integrated circuit chip project. 4) Refinancing activities – start and complete the issuance of the company’s convertible bonds at the right time, increase investment in project promotion, technological transformation and product R & D with the help of the power of the capital market, and promote the high-quality development of the company. 5) Project construction – start the construction of the company’s headquarters building and build a high-end science and technology park integrating operation center, R & D center and marketing center in Hangzhou comprehensive free trade zone; Start the construction of Hangzhou base living area project.
It plans to acquire Guojing semiconductor, strategically expand the production capacity of 12 inch silicon wafer and enhance its core competitiveness. Jinruihong, the holding subsidiary of the company, plans to acquire Guojing semiconductor. After the acquisition, jinruihong Microelectronics will directly hold 58.69% of the equity of Guojing semiconductor. The company will hold 77.97% of the equity of Guojing semiconductor through direct and indirect ways and obtain the control of Guojing semiconductor. The main products of Guojing semiconductor are 12 inch silicon wafers for integrated circuits. At present, all infrastructure construction with a monthly production capacity of 400000 silicon wafers has been completed. The fully automated production line for the production of 12 inch silicon wafers for integrated circuits has been put through. At present, it is in the stage of equipment installation and commissioning, customer introduction and product verification. At present, Guojing semiconductor is in the stage of customer introduction and product verification, and has not yet achieved operating revenue. As of December 31, 2021, it is in a state of loss. It is expected that Guojing semiconductor will achieve good performance after the completion of customer introduction and product verification. The acquisition is conducive to rapidly expand the company’s existing production scale of 12 inch silicon wafers for integrated circuits, and realize complementary advantages and resource sharing. Improving the company’s market position in 12 inch silicon wafers for integrated circuits, especially light doped silicon wafers for storage and logic circuits, is in line with the company’s development strategy and long-term plan and the interests of all shareholders of the company. A fixed increase of 5.2 billion yuan will be implemented, and the investment in silicon wafer + power semiconductor + silicon epitaxial wafer projects will continue to be increased. The company raised a total of 5.2 billion yuan to invest in the technical transformation project with an annual output of 1.8 million 12 inch silicon chips for integrated circuits, 7200006-inch power semiconductor chips, 2.4 million 6-inch silicon epitaxial chips and supplement working capital. The company will enrich product categories, expand product production capacity, improve industrial layout and enhance comprehensive competitiveness. Specifically, it will increase its share in the mainstream market of semiconductor silicon wafers, significantly increase the production capacity of grooved Schottky power diode chips, and consolidate the market leader position of silicon wafers of 8 inches and below.
Investment suggestion: Based on the company’s long-term growth momentum under the high demand of semiconductor silicon wafer and discrete device industry and domestic substitution logic, we expect the net profit of 22 / 23 / 24 years to be 950 / 13.73/1.831 billion yuan respectively, maintaining the “buy” rating.
Risk warning: the operating data from January to February 2022 are preliminary accounting data, which cannot be used to infer the annual performance, concentration of sales areas, rising labor costs, aggravation of the epidemic and loss of R & D technicians
