\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
Events
On March 12, the company released the performance express. In 2021, the company achieved a total operating revenue of 8.51 billion yuan, an increase of 89.3% year-on-year; The net profit attributable to the parent company was 2.337 billion yuan, a year-on-year increase of 165.3%; Net profit deducted from non parent company was 2.224 billion yuan, with a year-on-year increase of 300.5%. In a single quarter, the revenue of 21q4 was 2.186 billion yuan, a year-on-year increase of 68.1%; The net profit attributable to the parent company was 689 million yuan, a year-on-year increase of 231.4%; The net profit deducted from non parent company was 660 million yuan, which was – 20 million yuan in the same period of 21 years. The annual performance is in line with expectations and is optimistic about the future growth of the company.
Brief comment
MCU + nor two wheel drive in 21 years and three major businesses in 22 years
From the perspective of product structure, the company has grown from relying on nor in 2020 to MCU + nor two wheel drive in 2021. With the large volume of self-developed DRAM in 2022, the company’s three main products MCU + nor + DRAM began to make full efforts, corresponding to three businesses with a volume of US $1 billion in the future, and the growth space was opened. From the perspective of revenue structure, the product structure and customer structure of nor and MCU continued to upgrade, the revenue contribution of medium and high-end fields such as industry and vehicle increased, and the profit quality of the company improved.
Current situation: spinand has passed the vehicle regulation certification; The chairman terminated the reduction plan in advance
Recently, the company’s national 38nm spinand (gd5f full series) has passed aec-q100 vehicle regulation certification, with a capacity of 1 ~ 4GB. It can be used for on-board gateway, tachograph, intelligent cockpit, Tbox, etc., filling the gap of domestic high-capacity vehicle regulation storage. So far, the company’s main product NAND + nor + MCU has comprehensively laid out the vehicle regulations. In addition, Mr. Zhu Yiming, chairman of the company, terminated the reduction plan in advance and promised that he would not reduce his holdings in the next 12 months. This round of reduction accounted for about 1.6% of the total share capital. After the reduction, the controlling shares and actual controllers would not change.
MCU: the contradiction between supply and demand continues, and vehicle regulation products open up room for growth
In 2021, with strong demand and capacity shortage, the company’s MCU shipment doubled, the unit price increased and the gross profit margin increased. Under the background of MCU capacity shortage, the company’s MCU has entered the supply chain of more high-end customers to replace st and other overseas manufacturers. The proportion of industry and automobile has increased, and the product structure has continued to upgrade. In terms of new products, motor drive chips, power management chips and WiFi products based on MCU have been launched one after another. In terms of vehicle regulations, in addition to the existing vehicle rear mounted products, the company’s vehicle specification MCU is expected to be mass produced in the middle of 22 years. We continue to be optimistic about the high growth of MCU track, as well as the improvement of market share and customer structure of the company’s MCU. Brief evaluation report of the joint stock company
Norflash: strong terminal demand and upgrading of income structure
In 2021, the company’s norflash revenue increased significantly and the gross profit margin increased, mainly due to: (1) the contradiction between supply and demand: the tight supply in the whole year of 21 years led to the rise of norflash price; (2) Upgrading of customer structure: the proportion of revenue from industrial, communication and automobile customers has increased. In terms of vehicle regulations, 2GB high-capacity norflash has passed aec-q100 certification, completed the full coverage of 2Mb ~ 2GB capacity, and has been adopted in batches by many automobile enterprises; (3) Upgrading of product structure: the process node is transferred from 65nm to 55nm, and the proportion of products with high unit price and large capacity is increased. At present, the demand for industry, communication and automobile continues to be strong, and the company’s product structure continues to upgrade. We judge that the upgrading of customer and application structure brings room for price increase to norflash, and the revenue is expected to maintain high growth
DRAM: the price of niche DRAM is difficult to fall sharply, and the volume of self-developed products increases
We believe that it is difficult for the price of niche DRAM to fall sharply in 2022. With the large-scale growth of the company’s self-developed products, the revenue scale of self-developed DRAM will be significantly expanded in 2022. (1) Price: at the beginning of Q2, the demand is expected to improve, and Samsung Electronics and SK Hynix on the supply side shrink the capacity of niche DRAM. We judge that 22q2 will be the bottom of DRAM price, and it is difficult for the overall DRAM price to fall sharply in 2022. (2) Self developed new products: the company’s self-developed 19nmddr4 has been sold. It is expected that 17nmddr3 will be mass produced in mid-2022 and gradually contribute to revenue. In 2022, the company’s self-developed DRAM will accelerate the volume. The company expects the OEM cost of self-developed DRAM from Changxin storage to be about 860 million yuan, with a significant year-on-year increase of 355.0%. We calculate that the revenue of self-developed DRAM in 2022 is about 1.5 ~ 1.6 billion yuan.
Investment suggestion: under the background of terminal application upgrading and supply chain localization, as the local leader of storage + MCU + touch, the company continues to upgrade its product and customer structure, expand its scale rapidly, and has both scarcity and growth. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be 3.061 billion yuan and 3.861 billion yuan respectively, with a year-on-year increase of 31.0% and 26.1%, and the PE corresponding to the current market value will be 34 and 27 times respectively.
Catalytic factors of stock price: the prices of memory chips and MCU stabilize; Termination of shareholder reduction; Large volume of vehicle regulation products; The launch of new products exceeded expectations.
Risk warning: storage and MCU falling price; The increase of OEM cost erodes the gross profit margin; The demand for terminals such as TWS earphones is lower than expected; Customer development is less than expected; The launch of new products was less than expected.
