\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 19 Shenzhen Microgate Technology Co.Ltd(300319) )
The investment demand of filter localization is urgent, and the substitution process has entered a critical period. In terms of demand, 5g penetration promotes the volume and price of filters, the overall market space of RF filters is nearly US $10 billion, and the compound growth rate is expected to reach 14% in the next five years. In terms of competition pattern, at present, overseas manufacturers in the field of SAW filter and BAW filter still occupy a monopoly position. According to the third-party data, the localization rate is less than 5%. Under the background of Sino US trade disputes, the demand for domestic replacement of filters is very urgent. Chinese manufacturers are starting from the low end and making a breakthrough to the medium and high end in an orderly manner.
China's leader in RF filter, fully benefiting from the comprehensive layout of LTCC + saw + BAW. At present, the company has mass produced LTCC RF components and SAW filters, and is expanding high-performance tc-saw / tf-saw. In addition, the company has set up a subsidiary maijieruixin to engage in the R & D and production of BAW filters, which is expected to be mass produced as soon as possible. In the future, the company will realize the layout of the whole product line of LTCC + saw + BAW filters, and fully benefit from the development dividend of the industry.
5g boosts the demand momentum of inductors, and enjoys domestic substitution dividends in differentiated competition. The scale of the global inductance market is close to 50 billion yuan. The market growth mainly benefits from the penetration and popularization of 5g base stations and 5g mobile phones, which drives the volume and price of unit price inductors to rise simultaneously. In addition, the rapid popularization of electric smart vehicles also injects long-term growth momentum into the inductance industry. Based on the integrated inductor, the company competes with its competitors in a differentiated way. The product specifications are gradually improved and expanded from the consumer terminal to the field of intelligent vehicle. With the implementation of the advanced production capacity of the integrated inductor in this round of fund-raising and investment, the company is expected to further improve the market share by virtue of its production capacity advantage.
Subsidiaries jinzhichuan and Xingyuan electronics have improved their margin. Jinzhichuan's inductive transformer has expanded from the past base station field to the field of intelligent electric vehicles and photovoltaic inverters, successfully opening a new space for long-term growth, which is expected to fully benefit from the penetration of new energy industry. Thanks to the increased demand of overseas customers and the expansion of the company's product application field, the performance of Xingyuan electronics is expected to continue to pick up.
Profit forecast
"Buy" rating is given for the first time. We estimate that the net profit attributable to the parent company in 202123 will reach RMB 277.92/510 million, with a year-on-year increase of 677.4% / 41.5% / 29.9%, corresponding to EPS of 0.32/0.46/0.59, and PE valuation of 21-23 will be 30.74/21.73/16.72 times. As China's first-class core supplier of filters and inductors, the company will fully benefit from the localization and substitution of relevant parts by virtue of the implementation of the production expansion of the raised investment project.
Risk tips
Localization substitution is less than expected, raised investment projects are less than expected, and asset impairment risk
