\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
Investment logic
Smart watch + TWS dual driver smart device. 1) TWS earphones will experience three development stages from 0-1-10-n, and the growth rate of shipment will rise spirally. At present, it is in the second stage. As the brand replaces the white brand and the mobile phone cancels the headphone interface, the sales volume of TWS headphones will resume to grow. In 2021, the shipment volume of TWS headphones of global Android brand will be 141 million pairs, with a year-on-year increase of 60%, and the ratio with mobile phone configuration is only 13%. Assuming that the configuration ratio will reach 50% by 2026, the market scale of TWS headphone master chip is expected to reach US $1.4 billion, CAGR of 22-26 years is 25%. The company is positioned in the medium and high-end market. In the past 21 years, it has ranked first in the popular new TWS earphone chips. The replacement of white brand by brand will drive the company's share to rise again. 2) In the post epidemic era, health monitoring drives the growth of demand for smart watches. In the 21st year, the configuration rate of Android smart watches is only 4%. Assuming that the industry shipment CAGR in the next five years is 20%, the corresponding market space of master chip will reach US $1.135 billion in 2026 and 17% in 22-26 years. The company's smart watch master chip locates the smart Bluetooth watch with high integration and low power consumption. It has been successfully introduced into major customers. It is expected that the second generation 12NM chip launched in the second half of the year is expected to help the market development.
Smart home is popular under the whole house smart trend, which drives the large-scale SOC chip of smart speaker. Smart speaker is the entrance of smart home. Branding, high-end and sinking marketization will drive the long-term growth of the smart speaker market. Omdia expects the global smart speaker shipment CAGR to be 20.5% in the next five years. The company's first single-chip fully integrated WiFi / Bluetooth dual-mode aiot SOC has been applied to Alibaba and tmall genie. The dual band WiFi products in the mass production and shipment stage are widely recognized. The wi-fi6 smart speaker chip being deployed is expected to further explore the global market with Chinese foreign manufacturers, and the revenue CAGR is expected to exceed 30% in 21-23 years.
Bestechnic (Shanghai) Co.Ltd(688608) two major advantages: 1) attach importance to R & D investment, with significant technology first mover advantage: R & D expense rate can match the industry average, multiple equity incentives bind talents, and core personnel account for more than 80%. With high R & D investment, the company has formed three core technologies: active noise reduction, Bluetooth, low delay and low power consumption to help improve the performance of terminal intelligent products. 2) Deeply bind high-end customers and enable the company's long-term growth: the company has achieved cooperation with high-end mobile phone brands, professional audio manufacturers and Internet companies, and achieved full product line cooperation with Huawei and Xiaomi, which is beneficial to further consolidate market share and enable long-term sustainable development.
Investment advice
We are optimistic that the company is the leader in China's smart audio master SOC industry, benefiting from the increased penetration of TWS headphones and the new growth driven by smart watch chips and smart speaker chips. It is estimated that the net profit in 22-23 years will be 670 / 980 million yuan, with a year-on-year increase of 64.2% / 46.2%. The company will be given 35 times PE in 23 years, the target market value will be 34.306 billion yuan, the corresponding target price will be 285.88 yuan, and the "buy" rating will be given for the first time.
Risk
The demand is less than expected; Industry competition intensifies; Price rise of raw materials; Lifting the ban on stocks; Exchange rate risk, etc
