\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Event: the company released its annual report for 2021. In 2021, the company realized revenue of 2.577 billion yuan (+ 52.42%), net profit attributable to parent company of 514 million yuan (+ 287.20%), and net profit attributable to non parent company of 444 million yuan (+ 101388%). The basic EPS is 0.69 yuan and the weighted average roe is 20.77%.
Benefiting from the optimization of product structure and the implementation of price rise, the company’s performance has increased significantly. There is a strong demand in the downstream application market of integrated circuits. The company has seized the development opportunities of the industry, actively explored the market and new customers, optimized the product and customer structure, and achieved an increase in the operating revenue of each product line. Benefiting from the introduction of new products and the increase of unit prices of some products, the comprehensive gross profit margin increased by 12.95 percentage points over the previous year.
FPGA has obvious market advantages and gradually drives the further growth of performance. The company is the first 100 million gate FPGA manufacturer to launch the 28nm process in China, filling the gap of relevant technologies in China. FPGA revenue in the first three quarters of 2021 is about 304 million yuan. With the development of 5g communication technology and artificial intelligence technology and the sanctions imposed by the United States on relevant Chinese enterprises, the demand for domestic alternative supply chains will gradually increase. At present, the company is actively arranging the 14 / 16nm process FPGA. It is expected that the 14 / 16nm process products will provide the first sample of the products in 2022, and the mass production of the products is expected to be realized in 2023.
The storage business has made steady progress and the market share has increased steadily. At present, the company’s EEPROM process is synchronized with the international advanced level. At present, it is widely used in the automotive industry, smart meters, mobile phone camera modules and so on, with a high market share. Norflash / nandflash is widely used in electronic communication, set-top box, mobile phone module and other fields, and its market share has increased steadily. In the future, the company will enrich the application scenarios and continue to cultivate the downstream market.
The advantages of technology accumulation are obvious, and the MCU business can be expected in the future. The company’s MCU revenue in the first three quarters of 2021 was about 190 million yuan, and its business developed well. The company has two product lines: smart meter MCU and low-power general MCU. Among them, smart meter MCU is the supplier of the same category of the State Grid with the first market share and has many years of rich design experience. In the future, MCU business will actively expand application fields such as smart home and Internet of things, which is expected to become a new profit growth point.
Profit forecast: from 2022 to 2024, we expect the company’s revenue to be 3.253/4.044/5.007 billion yuan (+ 26.2% / 24.3% / 23.8%); The net profit attributable to the parent company was 671 / 887 / 1028 million yuan (+ 30.5% / 32.1% / 16.0%). The latest closing price corresponding to PE is 57 / 43 / 37 times respectively. The company is deeply engaged in the field of FPGA and storage and enters the vehicle specification level. Its performance is expected to achieve sustained and rapid growth. It is covered for the first time and is rated as “buy”.
Risk warning: the customer import is not as expected; The research and development of new products is not as expected.
