\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Event: the company released its 2021 annual report, with a revenue of 2.577 billion yuan, yoy + 52.42%; The net profit attributable to the parent company is 514 million yuan, yoy + 287.20%; Deduct 444 million yuan of net profit not attributable to parent company, yoy + 101388%; Gross profit margin 58.91%, year-on-year + 12.95pt; The net interest rate was 21.70%, with a year-on-year increase of + 12.22pt. Benefiting from the high prosperity of the industry, the company’s revenue and net profit increased significantly; At the same time, the company’s product structure has been continuously optimized, the growth rate of high gross profit products is fast, and the profit margin has increased significantly.
The business line has blossomed at multiple points, the application field has been continuously expanded, and many products have been certified by vehicle regulations. 1) The revenue of security and identification chips increased by 42.19% year-on-year to 866 million yuan; The gross profit margin was 51.07%, with a year-on-year increase of + 17.05pt. Smart card and security chip fm1280 and smart device FM17 series read-write chip have been certified by aec-q100; UHF RFID chip, UHF read-write chip and security se chip are continuously developed and are expected to be mass produced in succession. 2) The revenue of non-volatile storage increased by 41.56% year-on-year to 721 million yuan, with a gross profit margin of 55.65%, a year-on-year increase of + 10.32pt. We have successively introduced leading customers in the fields of network communication, IPC (network camera), wearable, WiFi 6 and display screen, and many projects in the field of automotive electronics have been successfully mass produced. 3) The revenue of smart meter chip increased by 64.18% year-on-year to 296 million yuan, with a gross profit margin of 56.60%, year-on-year + 22.79pt. LG series MCU of the company has successfully obtained aec-q100 certification and can be used for vehicle wipers, windows, seats, door locks, air conditioners, electronic shifters, etc. 4) IC test service revenue was 242 million yuan, yoy + 44.17%; The gross profit margin was 53.90%, with a year-on-year increase of -2.02pt.
FPGA has strong and high growth, which is deeply recognized by the market. The company’s “FPGA and other chips” revenue in 2021 was 427 million yuan, yoy + 109.49%; Gross profit margin 84.71%, year-on-year + 2.61pt; The output was 65.11 million and the sales volume was 63.33 million, with a production sales ratio of 97%. By the end of 2021, the company had sold 28nm related FPGA products to more than 300 customers from communication, industrial control, high reliability and other fields. The tool software procise developed by the company can support a full range of programmable devices and break through key advanced technologies such as the legalization method of FPGA overall layout and the wired display method of FPGA chip layout. The company’s embedded programmable PSoC was first introduced to the market in China, fully responding to the needs of high-speed communication, signal processing, image processing, industrial control and other fields, with good feedback.
We are optimistic about the continued growth of high-end FPGA chip production and sales. According to Frost & Sullivan, in the future, with the vigorous development of AI and 5g technology, the demand of emerging markets will continue to grow. The FPGA market scale is expected to reach about US $12.58 billion in 2025, and the CAGR will be about 16.4% from 2020 to 2025. It is expected that the FPGA market scale in China will reach about 33.22 billion yuan by 2025. The technology breakthrough of Chinese FPGA manufacturers is expected to accelerate the growth in the future. The company is in a leading position in the field of FPGA chip design in China. Its products are mainly used in the field of high reliability and strong profitability. The company is actively promoting the development of a new generation of 14 / 16nm 1 billion gate products, and further enriching the types of 28nm FPGA and PSoC chips to expand new markets. We expect the company’s revenue to be 3.247/40.59/5.033 billion yuan in 2022 / 2023 / 2024; The net profit attributable to the parent company is RMB 653 / 901 / 1160 million; Corresponding to PE 56.2 / 40.7 / 31.6 x, maintain the “buy” rating.
Risk tip: downstream demand is less than expected, Sino US science and technology friction
