\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Events
The company released its annual report for 2021 on March 21. In 2021, the company achieved a revenue of 2.58 billion yuan, a year-on-year increase of 52.4%; The net profit attributable to the parent company was 514 million yuan, a year-on-year increase of 287%, deducting the net profit not attributable to the parent company of 444 million yuan, a year-on-year increase of 1014%. In the fourth quarter of 2021, the company achieved an operating revenue of 745 million yuan, a year-on-year increase of 50% and a month on month increase of 6%; The net profit attributable to the parent company was 130 million yuan, a year-on-year increase of 371%, and the provision for equity incentive and other expenses decreased by 35% month on month.
Business analysis
The company takes the lead in FPGA technology in China. The annual revenue of FPGA and other chips in 2021 was 430 million yuan, with a year-on-year increase of 109% Shanghai Fudan Microelectronics Group Co.Ltd(688385) is one of the leading companies in the field of FPGA technology in China. At present, it can provide a series of products such as 10 million gate level, 100 million gate level FPGA chips and embedded programmable chip (PSoC). The company is actively developing a new generation of 1 billion gate level products based on 14 / 16nm process, and further enriching the types of FPGA and PSoC chips based on 28nm process, so as to expand new markets and maintain the company’s leading position in domestic FPGA technology.
The company’s MCU business achieved downstream application expansion, with a revenue of 300 million yuan, a year-on-year increase of 64%, a gross profit margin of 56.6%, and a year-on-year increase of 22.8pct. In industrial control, smart home, automotive electronics and other fields, the proportion of general low-power MCU has gradually increased. The company has worked in the Internet of things industry for many years. With excellent low-power performance, it has been widely used in the fields of Internet of things, water and gas heat meter and smart city, which are very sensitive to chip power consumption. The company actively launched new products according to the characteristics of white goods, motor drive, new energy, pan IOT and other fields. LG series MCU of the company has successfully obtained aec-q100 certification. The target application fields include vehicle wiper, window, seat, door lock, air conditioner, electronic shifter, etc.
The company’s security and identification chips and nonvolatile memory increased both in volume and price, with revenue increasing by 42%, and a variety of products passed vehicle regulation certification. The gross profit margin of security and identification chip was 51%, with a year-on-year increase of 17pct, and the gross profit margin of nonvolatile memory was 56%, with a year-on-year increase of 10PCT. Smart cards, security chips and smart identification device chips have steadily expanded to new fields represented by the Internet of things, such as device security certification, communication security and device connection. At the same time, some products have obtained vehicle regulation certification and made breakthroughs in the fields of vehicle Tbox security chips and digital keys. The nonvolatile memory product line has also successfully entered mass production in the field of automotive electronics. There is a prospect of a significant increase in flash demand in China’s smart meters, VR / AR, vehicle ADAS and other markets in the future.
Profit adjustment and investment suggestions
It is estimated that the company’s revenue in 202224 will be 3.33/41/49 billion yuan, with a year-on-year increase of 30% / 23% / 18%. The net profit attributable to the parent company is predicted to be 7.1/9.0/1.13 billion yuan, with a year-on-year increase of 38% / 27% / 25%. The corresponding PE is 54 / 42 / 34, maintaining the “buy” rating.
Risk tips
FPGA market demand and the company’s market penetration are less than expected; Memory cyclical risk; Safety and identification chip gross margin decline risk; Wafer capacity support is less than expected risk
