\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )
Will Semiconductor Co.Ltd.Shanghai(603501) as one of the top three CMOS image sensor chip design enterprises in the world, it has formed a semiconductor design business system with coordinated development of image sensor solutions, touch and display solutions and simulation solutions. In 2021, the company had obvious growth in all business segments. According to the company’s business briefing in 2021, the company achieved revenue of about 24 billion yuan, a year-on-year increase of about 21%, of which the semiconductor design business achieved operating revenue of about 20.5 billion yuan, a year-on-year increase of about 18%; The net profit attributable to the parent company in 2021 was 4.47 ~ 4.87 billion yuan, with a year-on-year increase of 65.13% to 79.91%.
1. Automobile business: Automobile will become the second largest business of the company after mobile phone
(1) at present, the global intelligent vehicle industry is in a period of rapid development. With the continuous improvement of automatic driving level, the number of CIS used by single vehicle is increased from 1 ~ 2 to more than 10. The company’s on-board CIS will usher in the opportunity of both volume and price. The company’s on-board CIS revenue in 2021 was about 2.3 billion yuan, an increase of about 85% over 2020. We are optimistic about the future growth trend.
The company has invested more than 16 years in research and development in the vehicle field, and its products cover the range from VGA to 8 million pixels, which can meet the expansion of product application fields from traditional reversing radar image and tachograph to electronic rear-view mirror, 360 degree panoramic imaging, advanced driving assistance system (ADAS), driver monitoring (DMS) and other fields. The products sold by the company are more complete than those of its friends, especially the products with a large market share in the range of 1.3 million to 3 million pixels in recent years. As a leading chip design company in China, the company has close cooperation with the world’s mainstream wafer factories. The company has sufficient capacity to meet the demand of the company’s share growth.
The company’s product quality has been recognized by many automobile brands outside China. The company has deep cooperation with foreign manufacturers in China, and has obtained scheme introduction in many model schemes. In the past two years, based on the cooperation of the original mainstream automobile brands in Europe and America, the company has introduced a large number of schemes into Chinese traditional automobile brands and new forces in automobile manufacturing, which will also bring new revenue and profit growth points to the company. At the same time, the company also has a breakthrough in the introduction of schemes in car enterprises such as Japan and South Korea.
(2) the company has a product quality system and R & D strength recognized by global automobile brands. Focusing on the automobile market, in addition to image sensors, the company has continuously increased R & D investment in MCU, LVDS, LCOS, power IC, MOS, drive and other fields. It will be introduced into the automobile market in succession in the past two years to provide customers with overall solutions. Under the trend of automobile electronization and intellectualization, the company will usher in huge business opportunities.
2. Touch and display business: it will become an important growth engine in the future
In 2021, the company also made great breakthroughs in touch and display solutions. (1) Tddi products have been mass produced in many first-line mobile phone brand customer schemes. In 2021, the company’s tddi product revenue exceeded 1.8 billion yuan, with a year-on-year increase of about 160%. In 2021, the supply-demand relationship of tddi products in the market is relatively tight, and the average gross profit margin of products has been at a high level, which has also brought a good profit contribution to the company. (2) In addition, the company recently launched oledddic products to further improve the product matrix of touch and display solutions. The company’s oledddic products have been verified in China’s head screen factory and will be applied to smartphone customer product solutions in 2022. The company will also continue to increase R & D investment in the field of small and medium-sized screens to achieve coverage in the automotive, laptop, tablet and other markets.
3. AR / VR: as an important supplier of global leading enterprises, weir is expected to deeply benefit from the wave of meta universe
The company’s CMOS image sensor, cameracubechip, LCOS, touch chip, power IC and other products have been used in the AR / VR field, and the value provided by a single machine continues to increase. CMOS image sensor is one of the core chips to realize the application scenarios in the AR / VR field. The company’s profound product and technology accumulation has been widely recognized in the industry. The company’s industry-leading BSI global shutter and other technologies will provide customers with high-quality eye tracking, facial expression recognition and other solutions, and help AR / VR head display equipment customers develop more functional and high-performance product solutions.
4. CMOS image sensor business in smart phones, security and other fields
In the field of smart phones: in 2021, the company steadily increased the proportion of image sensor revenue of high-order pixels in the field of smart phones, and has successfully launched 200 million pixels and the world’s smallest 0.61 micron pixel size product applied to smart phones. The company has a good market share in Android smartphones in different price ranges, and the proportion of high-order pixel products in the operating revenue of the company’s mobile phone CIS continues to increase. In terms of specific product models, the company has successfully launched 50 million to 200 million pixel products with different pixel sizes to meet the application needs of smart phones in different price ranges. The company will continue to increase R & D investment in high-order pixel products. In addition, the company will increase R & D investment in the field of event based image sensor (EVS) and hyperspectral image sensor to achieve higher product performance. The company is the first company in the world to break through the 0.56 micron pixel size technology node, and will provide customers with higher performance and cost-effective solutions in future products.
In the field of security, the company continued to make efforts in medium and high-end security products. In 2021, the operating revenue of security CIS products increased by about 70%. In addition, the operating revenue of the company’s image sensor products has also increased significantly in the fields of notebook computers, medical treatment, AR / VR and so on.
5. Analog chip business
Based on the core intellectual property rights of the original simulation business, the company will launch more products in the application fields related to image sensors and screen display. In addition, the company’s R & D investment in medium and high voltage MOS, IGBT and other fields in recent years will be successively realized in the company’s performance, and the company has also arranged the R & D investment of SiC products. The company will continue to give full play to the advantages of platform, enhance the R & D capacity of analog products by expanding the R & D team, and realize the rapid growth of analog chip field.
Profit forecast, valuation and rating: actively grasp the bottom platform leader, and have clear short, medium and long-term product logic. According to the performance express, the net profit attributable to the parent company of our Shangxiu company in 2021 was 4.67 billion yuan (+ 4.5%, the previous value was 4.469 billion yuan). Considering that the auto business, touch display business, arvr and other businesses are expected to drive Will Semiconductor Co.Ltd.Shanghai(603501) rapid growth in the future, the net profit attributable to the parent company of our Shangxiu company from 2022 to 2023 was 5.88 billion yuan (+ 5.9%, the previous value was 5.554 billion yuan), 7.13 billion yuan (+ 4.3%, the previous value was 6.832 billion yuan). At present, the market value of about 188 billion yuan corresponds to 40, 32 and 26 times of PE respectively, maintaining the “buy” rating.
Risk tip: the progress of smartphone and VR / AR is less than expected, and the technology research and development is less than expected.
