\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
[matters]
Recently, the company released the performance express of 2021 and the announcement of main operating data from January to February 2022. In 2021, the company’s revenue was 8.51 billion yuan, a year-on-year increase of 89.3%, the annual net profit attributable to the parent was 2.34 billion yuan, a year-on-year increase of 165.3%, and the net profit deducted from non attributable to the parent was 2.22 billion yuan, a year-on-year increase of 300.5%.
From January to February 2022, the company achieved a revenue of about 1.35 billion yuan, a year-on-year increase of 49.2%. Memory, MCU and other products continue to be in short supply, and the business has maintained rapid development, realizing a good start in 2022.
[comments]
Relying on the extensive customer base, market foundation and perfect product line layout accumulated over the years, the company seizes the opportunity of the growth of terminal intelligent demand and the localization of the supply chain of the integrated circuit industry, develops new products, expands new markets and customers, continuously upgrades and optimizes the product and customer structure, gives full play to the diversified layout advantages of the supply chain and provides strong capacity guarantee. Thanks to the forward-looking strategic layout and continuous R & D innovation, as well as the rapid response ability to respond to changes in market supply and demand, the company achieved rapid growth in operating performance and a significant increase in revenue and profits in 2021. At the same time, in terms of supply chain management, the company made efficient use of production capacity resources, alleviated the pressure of structural supply, and achieved significant growth in performance since the beginning of 2022.
The product line is becoming more and more perfect, the product structure is obviously optimized, and the highly reliable fields such as vehicle regulations and engineering regulations are enriched.
MCU business includes three parts: MCU, sensor and memory. The company has a wide range of flash products and provides a diversified product portfolio for the market. Nor flash vehicle specification products have achieved a full coverage of 2mb-2gb capacity. They are mainly used in on-board auxiliary driving system, on-board communication, on-board information entertainment, Battery Management System BMS, etc., and have been adopted in batches by many vehicle manufacturers. The DRAM products of the company have successfully achieved mass production in June 2021. Through the generation difference advantage in the process, the company has effectively reduced costs, rapidly developed niche markets and occupied a certain market share. It has passed the certification of many mainstream platforms in the field of consumer applications. In terms of microcontroller MCU products, as the leading manufacturer of 32bitmcu in China, the product process covers 110nm-40nm. The demand for MCU products remains strong during the year. The company has achieved good growth in industry, medical treatment, entertainment and other fields. The latest vehicle specification MCU has been released during the year. It is expected to achieve mass production in the middle of 2022. Under the background of strong demand in the MCU market as a whole, The company is optimistic about the continuous growth of MCU business. In addition to the existing touch products and fingerprint products, the sensor business actively develops product lines including ultrasound, TOF and so on. The company’s business focuses on the overall layout of sense, storage, calculation, control and connection horizontally, and continues to make efforts in depth in advanced process technology, automobile, industry and other highly reliable fields to boost the long-term localization process.
[investment suggestions]
The company’s business performance in 2021 exceeded our previous expectations. Due to the increasingly perfect and rich layout of the company’s product lines in NOR flash, DRAM and other memory, consumption, industrial control, vehicle specification MCU, and sensor products, and strong market competitiveness, we are optimistic that the company will continue to have a tight chip supply chain, terminal intelligent vehicles, Internet of things equipment Strong demand in new fields such as industrial control and long-term development under the background of domestic substitution. We raised the company’s revenue and gross profit margin from 2021 to 2023. It is estimated that the company’s revenue from 2021 to 2023 will be 8.510 billion yuan, 11.788 billion yuan and 15.180 billion yuan respectively, the net profit attributable to the parent company will be 2.337 billion yuan, 2.933 billion yuan and 3.562 billion yuan respectively, and the EPS will be 3.50, 4.39 and 5.34 yuan / share respectively, corresponding to 42, 33 and 28 times of the current PE respectively, maintaining the “overweight” rating.
[risk tips]
The prosperity of downstream application market is lower than expected
The improvement cycle of new product verification and new process yield is longer than expected
The shortage of OEM capacity has intensified, and the cost of materials and processing has increased
