\u3000\u3 Guocheng Mining Co.Ltd(000688) 508 Wuxi Chipown Micro-Electronics Limited(688508) )
Events
Wuxi Chipown Micro-Electronics Limited(688508) released the annual performance report for 2021: the company achieved an operating revenue of 753 million yuan in 2021, with a year-on-year increase of 75.44%, a net profit attributable to the parent company of 201 million yuan, with a year-on-year increase of 101.81%, and a net profit attributable to the parent company of 151 million yuan after deduction, with a year-on-year increase of 88.42%.
Key investment points
The annual performance forecast exceeds the upper limit of the whole year and the best performance in the fourth quarter of 2021
According to the company’s annual performance report, excluding the impact of share based payment expenses, the annual net profit attributable to the parent company was 238 million yuan, a year-on-year increase of 139.08%, and the net profit attributable to the parent company after deducting non shares was 189 million yuan, a year-on-year increase of 134.51%. Q4’s performance was the best in the whole year, with an operating revenue of 218 million yuan, a year-on-year increase of 45.33%. The net profit attributable to the parent company in a single quarter was 72 million yuan, a year-on-year increase of 80% and a month on month increase of 22%.
In terms of breakdown products, household appliances, standard power supply and industrial control achieved revenue of 346 million / 259 million / 118 million respectively, with a year-on-year increase of 89.47% / 54.88% / 122.83% respectively. In terms of gross profit margin, the overall gross profit margin of the company in 2021 was 43% (year-on-year + 5.3pct), of which the gross profit margins of household appliances, standard power supply and industrial control were 46.01% / 34.2% / 55.01% respectively, with a year-on-year increase of 1.32pct/5.51pct/11.54pct respectively. In terms of period expenses, affected by the amortization of equity incentives, the period expense rate of the company has increased. In 2021, the expense rate (excluding R & D) is 3.92% (year-on-year + 1.01pct), of which the sales expense rate is 1.38% (year-on-year + 0.16pct), the management expense rate is 3.51% (year-on-year + 0.12pct), and the financial expense rate is – 0.96% (year-on-year + 0.74pct). In addition, the R & D expense ratio of the company reached 17.49% in 2021, with a year-on-year increase of 3.84pct.
Focusing on the power management track, the synergy of various product lines has been significantly improved
The company has strong technical strength and market competitiveness in the field of high-voltage power management chips such as AC-DC and gatedriver. In the field of household appliances, the company is the mainstream domestic power chip provider of Chinese household appliance brand manufacturers. In 2021, the company continued to increase its share in the market of small household appliances, broke through the benchmark customers in all aspects, and gradually increased the volume of power supply and drive chips; In the field of standard power supply, the company is a leading manufacturer of Netcom, DVB and mobile phone fast charging. It is a major domestic power chip provider. In 2021, the number of power chips for e-commerce customers and mobile phone brand customers will gradually increase; In the field of industrial control, the company is a leading domestic power chip provider of motors, smart meters and communication base stations. In 2021, the sales volume of power supply and drive chip benchmark customers in the three sectors of motors, power and communication increased significantly. At the same time, with the enrichment and improvement of product lines, the company has gradually developed from providing a single high-voltage power management chip in the past to providing customers with a complete set of power solutions from high-voltage and low-voltage power supply, drive and its supporting devices / modules (including AC-DC, DC-DC, gatedriver (HV & LV) and other power management chips), which has shortened the development cycle of end customers and significantly improved the synergy of the company’s product lines.
Overweight vehicle regulations and research and development of industrial high-end products benefit from automobile electricity
Automation and industrial digitization
The company plans to raise no more than 1.099 billion yuan for the R & D and industrialization project of high-voltage power supply and electric drive power chip of new energy vehicles (with an investment of 384 million yuan), the R & D and industrialization project of industrial digital power management chip and supporting power chip (with an investment of 473 million yuan) and the project of Suzhou R & D Center (with an investment of 242 million yuan).
Layout high growth new energy vehicle tracks, build production lines and enhance competitiveness: the company will develop a series of chips for 400V / 800V battery oriented high-voltage power conversion and distribution system and high-voltage drive system for new energy vehicles, including high-voltage power control chip, high-voltage half bridge drive chip, high-voltage isolation drive chip, high-voltage auxiliary source chip and intelligent IGBT and SiC devices. At the same time, the company joined hands with the packaging and testing manufacturers to build a vehicle specification semiconductor packaging and testing production line and strengthen the guarantee of the supporting packaging and testing capacity of the project product line, which is conducive to the company to form the technical advantages of the combined products of intelligent power devices, power control chips and power modules, and improve the product line coverage in the target market.
Cut into the high-power digital industrial scene and break the overseas monopoly in high-end fields: the company will develop products including high-power digital power control chip, high-frequency switch module integrating bridge drive and intelligent sampling, high-frequency Gan drive chip, intelligent Gan device and Gan module for high-power industrial scenes such as data center, server, base station, photovoltaic inverter and energy storage, and build an industrial semiconductor test center. The technical threshold of industrial power management chip market is high. The company is expected to gradually fill the gap of digital solutions in China’s power management field and realize the domestic substitution of digital power management chip products required in medium and high-end application fields.
We believe that the company has a leading position in the field of high-voltage power management chips, and the synergy of various product lines has been significantly improved. The high-voltage chips of new energy vehicles and industrial power management chips laid out this time belong to the high boom growth track with high gross profit margin. In the future, it is expected to help the company further improve its comprehensive competitive strength and have sufficient medium and long-term growth momentum.
Profit forecast
Without considering the impact of additional share capital, it is predicted that the company’s revenue from 2022 to 2024 will be RMB 1107 million, RMB 1543 million and RMB 1969 million respectively, and EPS will be RMB 240 million, RMB 337 million and RMB 446 million respectively. The current share price corresponding to PE is 43, 31 and 23 times respectively, maintaining the “recommended” investment rating.
Risk tips
Downside risk of industry prosperity, risk that the progress of additional issuance is less than expected, risk that the progress of product R & D is less than expected, risk of intensified industry competition, risk of overseas policy changes, etc.
