\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 74 Changsha Jingjia Microelectronics Co.Ltd(300474) )
Event: Recently, the company issued several Announcements: ① a company plans to purchase 100000 high-performance graphics processing chips and graphics cards from Changsha Jingmei integrated circuit design Co., Ltd., a wholly-owned subsidiary of Changsha Jingjia Microelectronics Co.Ltd(300474) Changsha Jingjia Microelectronics Co.Ltd(300474) ; ② Signed a strategic cooperation agreement with a company to jointly research and develop public security special PC equipment and server equipment based on security technology and develop industry solutions based on independent security system for PC equipment and server equipment in various fields dominated by public security.
The first batch of 9 series chip orders have been placed, and the promotion progress is accelerating. According to the announcement on the signing of cooperation agreement by the wholly-owned subsidiary of the company, we believe that the 100000 chips to be purchased by a company this time may be jm9 series chips that have been disclosed and tested (this series of products can meet the needs of high-performance display such as geographic information system, media processing, CAD aided design, games, virtualization and Artificial Intelligence Computing). From the perspective of progress, the company’s 9-series chips will be released in September 2021 and tested in November. It plans to obtain orders in March this year, covering about half a year, which is significantly shorter than the promotion time of 7-series chips (7-series chips will be tested in September 2018 and obtained orders by the end of 2019), indicating that the adaptation and promotion of 7-series chips on the client has laid a good foundation for the promotion of 9-series, and continues to be optimistic about the performance elasticity brought by subsequent volume to the company.
Cut into the public security PC equipment and server equipment market and continue to expand the application field. The main business of party a signing the strategic cooperation agreement this time is public security dedicated PC, server and industry solutions, and has long-term business cooperation with public security departments in many provinces and cities across the country. In this strategic cooperation agreement, Party A is mainly responsible for the product registration and application license application of public security dedicated PC and server, and carries out the national promotion of public security dedicated PC and server with a brand of the Ministry of public security or Changsha Jingjia Microelectronics Co.Ltd(300474) brand Changsha Jingjia Microelectronics Co.Ltd(300474) is mainly responsible for providing technical documents, development manuals and other technical materials of GPU and graphics card, and arranging technicians to cooperate with Party A in the design, implementation, adaptation and testing of security functions of public security dedicated PC, server and industry solutions. We believe that this agreement shows that the company is continuously expanding to emerging fields based on its own GPU chip strength, and is expected to become a new growth point of the company in the future.
Military products + civilian products resonate, and domestic GPU leaders have broad prospects. ① Military products: the company’s main products in the military field include picture display modules and small specialized radars. Among them, the figure display module mainly adopts the jm5400 chip developed by the company, which realizes the domestic substitution in the military field. In recent years, the company has carried out technological innovation and product expansion according to the application needs of different industries, actively extended to other fields, and continuously developed and provided appropriate graphic display and control modules and their supporting products for the broader application fields such as vehicle mounted, ship display and control and general market. At the industry level, during the 14th Five Year Plan period, the packaging of weapons and equipment will enter a large-scale stage, and the procurement is expected to improve, which will fully benefit the company; ② The research and development of GPU chips has been continuously improved (the first generation and the third generation of GPU chips have been continuously expanded to catch up with the development of the first generation and the third generation of foreign companies), and the development of GPU chips has been further improved (the first generation and the third generation of GPU chips have been continuously expanded to the second generation and the third generation respectively). The company’s business has formed a resonance pattern of military products + civil products, and the high outlook in the two fields is expected to continue to provide growth momentum for the company.
Maintain the “buy” rating: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 282 million, RMB 452 million and RMB 657 million, and the corresponding PE will be 114, 71 and 49 times respectively.
Risk tip: the expansion of civil market is less than expected, and the promotion progress of 9 series chips is less than expected.
