\u3000\u3 Bohai Water Industry Co.Ltd(000605) 358 Hangzhou Lion Electronics Co.Ltd(605358) )
Event:
The company released its annual report for 2021: in 2021, the company achieved a revenue of 2.541 billion yuan (a year-on-year increase of 69.17%), and a net profit attributable to the parent company of 600 million yuan (a year-on-year increase of 197.24%); Among them, in the single quarter of 2021q4, the company realized a revenue of 788 million yuan (a year-on-year increase of 67.86% and a month on month increase of 8.67%), and a net profit attributable to the parent company of 196 million yuan (a year-on-year increase of 992.82% and a month on month increase of 0.41%).
Key investment points:
The performance in 2021 is in line with expectations, and the performance of the company driven by silicon chip + power + RF continues to increase. Benefiting from the high prosperity of the industry, the company's production and sales are booming, while optimizing the product structure and product price, driving the company's revenue to achieve rapid growth. In 2021, the company sold 7.0817 million silicon chips (a year-on-year increase of 33.82%), 1.539 million power devices (a year-on-year increase of 40.58%), and 7800 RF chips (a year-on-year increase of 461.82%). In terms of business, the silicon chip business company achieved a revenue of 1.459 billion yuan (a year-on-year increase of 49.85%), a gross profit margin of 45.45% (a year-on-year increase of 4.79 PCT), a power device business revenue of 1.007 billion yuan (a year-on-year increase of 100.34%), a gross profit margin of 50.95% (a year-on-year increase of 21.00 PCT), and a radio frequency chip business revenue of 44 million yuan (a year-on-year increase of 474.32%), The gross profit margin was - 93.77% (a year-on-year increase of 152.17pct), and the gross profit margin improved significantly year-on-year. The company's ability to control expenses has been steadily improved. In 2021, the company's expense rate (excluding R & D) was 7.68% (a year-on-year decrease of 3.00pct), of which the rates of sales, management (excluding R & D) and financial expenses were 0.70% (a year-on-year increase of 0.08pct), 2.78% (a year-on-year decrease of 1.00pct) and 4.20% (a year-on-year decrease of 2.08pct). The company has greatly strengthened its R & D efforts. In 2021, the R & D cost was RMB 229 million (a year-on-year increase of 104%), and the R & D cost rate was 9.01% (a year-on-year increase of 1.56 PCT).
The product structure improved significantly, and the three major businesses continued to make breakthroughs. In terms of silicon wafers, as the leader of China's industry, the company's production capacity advantage has been brought into full play. The 6-inch and 8-inch production lines operate at full load for a long time, and the supply of heavily doped silicon epitaxial wafers is in short supply. The volume of 12 inches is obvious. By the end of 2021, the annual production capacity will reach 1.8 million pieces, and the customer supply has made a major breakthrough. The technical capability has covered more than 14nm technical nodes, mainly selling products, carrying out sample delivery verification and climbing production and sales. In terms of power devices, photovoltaic products continue to increase, accounting for 43-47% of the global annual sales of photovoltaic chips. Shipments of trench chips increased by 260% year-on-year, and flat Schottky products increased by 170% year-on-year. The monthly orders of Schottky and MOS chips related to power supply far exceed the actual production capacity, with full production and sales throughout the year. In terms of RF chips, customer certification has been superimposed for many years, technology accumulation, accumulation and development have ushered in the momentum of leapfrog development, and the company has developed 0.15 μ A number of processes and products with low cost, high performance, high uniformity and high reliability such as me modephemt have successively entered the market, forming large-scale commercial sales and maintaining rapid volume. It has more than 60 high-quality customer groups such as angruiwei and xinbaite.
Acquire Guojing (Jiaxing) semiconductor to strengthen the strength of light doped products. The company 2022m2 announced that it plans to acquire 77.97% equity of Guojing semiconductor. At present, Guojing has completed all infrastructure construction with a monthly production capacity of 400000 wafers, and the automatic production line of 12 inch silicon wafers for integrated circuits has been connected, which is in the stage of customer introduction and product verification. We believe that the company's acquisition of Guojing semiconductor will help to rapidly expand the existing production scale of 12 inch silicon wafer, strengthen the technical strength of light doping, grasp the domestic substitution opportunity and realize rapid development. At the same time, the company's fixed increase of 5.2 billion yuan has been implemented, which is conducive to further improving the company's production capacity, realizing the advantages of technology and scale, and enhancing the market competitiveness of semiconductor silicon wafers and power devices. On the whole, the company's acquisition of Guojing semiconductor and the implementation of fixed growth will help to continue to consolidate and develop its technical advantages, expand silicon wafer categories and production capacity, and lay out the power track. Under the background of the continuous improvement of industry prosperity and the continuous expansion of downstream demand, the company has sufficient growth momentum.
Profit forecast and investment rating: Hangzhou Lion Electronics Co.Ltd(605358) as a rare complete industrial chain platform with silicon wafer and power device manufacturing capacity in China, it has strong competitive advantages in industrial chain integration, technology research and development, product customers and so on. We believe that with the expansion of downstream wafer factories, the expansion of demand in new energy vehicles, 5g, industrial control and other fields, and the general trend of domestic substitution under the background of independent control, the prosperity of semiconductor silicon wafers and power devices in China is expected to continue. We believe that the company has strong core competitiveness, based on traditional advantageous fields, overweight layout in the field of large silicon wafers and power devices, and cut into the GaAs RF OEM market, which is expected to rise up and grow rapidly. Based on the principle of prudence, without considering the impact of the acquisition of Guojing semiconductor on the company's performance and share capital, we maintain the profit forecast unchanged. It is expected that the company's net profit attributable to the parent company from 2022 to 2024 will be RMB 942 / 1173 / 1472 million respectively, the corresponding EPS will be RMB 2.06/2.57/3.22/share respectively, and the corresponding current PE valuation will be 51 / 41 / 33 times respectively, maintaining the "buy" rating.
Risk warning: the downstream demand is less than the expected risk; Risk that the acquisition progress is less than expected; The company's new product R & D progress is less than the expected risk; Risk that the progress of new product introduction is less than expected.
