\u3000\u3 Guocheng Mining Co.Ltd(000688) 123 Giantec Semiconductor Corporation(688123) )
Core view
Chinese memory is in the uplink cycle, and small capacity storage is a good entry point for domestic IC. The memory chip market accounts for the highest proportion, with the growth rate far exceeding the industry average. China’s storage demand is strong, but the self-sufficiency rate is low.
Highlight 1: China’s EEPROM leader. At present, the company has become the world’s leading EEPROM chip design enterprise, with EEPROM market share ranking first in China and third in the world. As the head supplier of EEPROM, it has accumulated more high-quality customer resources.
Highlight 2: continue the advantages of customer base and enter nor flash. NOR flash and EEPROM have overlapping customer groups, and their application scenarios are similar and complementary. The company continues the customer group advantages of EEPROM, which is of great help to the market expansion of NOR flash. Moreover, with the gradual withdrawal of storage giants from NOR flash market, mainland storage manufacturers will face better filling opportunities.
Highlight 3: there are many new growth points, and the application extends to automotive electronics and servers. At present, the company’s A2 Level products have been very mature and passed the A1 level certification. It has obtained the compliance certificate of IATF 169492016 quality management system of automobile industry issued by a third-party authority. It has realized benefits, and the A0 level products are also in continuous layout. In the server field, spd5 EEPROM and spd5 + TS EEPROM products developed in cooperation with Montage Technology Co.Ltd(688008) will jointly help ddr5 memory module to achieve comprehensive improvement in speed, capacity, energy saving and reliability, and further open the sales channel with downstream customers. There will be a new breakthrough in sales and gross profit.
Point 4: underestimate the value. According to the fitting result of PSG market value, Giantec Semiconductor Corporation(688123) market value corresponds to PSG of 54.04, while the present value is only 29.41. According to the fitting result of PSG net profit, the PSG corresponding to Giantec Semiconductor Corporation(688123) net profit should reach 64.87, while the present value is only 29.41.
Financial analysis: the three product lines have new growth points. EEPROM: extending to automobile and server, ASP will be greatly driven, and the gross profit is expected to be higher in 1-2 years; Voice coil motor chip: open-loop → closed-loop → OIS, layout in the direction of structural optimization and value improvement. The customer base coincides with the customer base of CCM products. It is logical to expand sales in the original customer base in the future; Smart card chip: the overseas market space is broad, and the downstream of the company is sold overseas, with good growth prospects.
Risk warning: the product R & D progress is less than expected; Customer expansion was less than expected.
