\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
On March 21, Wuxi Nce Power Co.Ltd(605111) released its annual report. The company achieved a revenue of 1.498 billion yuan in 21 years, with a year-on-year increase of 56.89%; The net profit attributable to the parent company was 410 million yuan, a year-on-year increase of 194.55%. In the fourth quarter alone, the company achieved a revenue of 399 million yuan, a year-on-year increase of 38.06% and a month on month decrease of 5.55%; The net profit attributable to the parent company was 100 million yuan, with a year-on-year increase of 159.64% and a month on month decrease of 26.82%.
The product structure continues to be optimized, and the growth is driven by medium and high voltage MOS + IGBT. The company has formed five product platforms: trench MOS, shielded gate MOS, superjunction MOS, IGBT and third-generation semiconductor. At present, it is continuously launching new products, such as IGBT 650V, 1200V high-frequency low saturation voltage drop IGBT, which has been stably mass produced. The 650V high-density trench gate IGBT using carrier storage technology has been preliminarily developed, and a number of IGBT module products have entered small batch production. In terms of structure, the proportion of trench MOS revenue of the company has further decreased from 55.79% in 20 years to 45.31% in 21 years, and the proportion of shielded gate MOS and IGBT has increased to 38.96% and 5.39% respectively. We expect that the proportion of trench MOS will further decline in 22 years due to core shortage and product upgrading of the company.
In addition, the company further reduced the sales of chip products, and its revenue proportion decreased from 18.39% to 9.53%.
The downstream will be upgraded to automobile and photovoltaic, the gross profit margin will rise steadily in the short term, and the revenue space will be opened in the long term. The downstream revenue of the company's pure consumer category fell to less than 20%, and cut into medium and high-end industries with better gross profit margin, such as new energy vehicles, UAVs, industrial power supply, photovoltaic and so on. Among them, Byd Company Limited(002594) , which has been introduced into automobile, has realized the mass supply of more than a dozen products, and has entered the whole machine parts factories of several automobile brands; In terms of photovoltaic energy storage, the company's IGBT and MOS have achieved mass sales in Sungrow Power Supply Co.Ltd(300274) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Deye and other leading enterprises. We expect that the proportion of photovoltaic + automobile revenue in 22 years is expected to reach more than 30%. Cutting into industrial major customers can ensure the steady rise of the company's gross profit margin and boost the space of long-term revenue.
Close cooperation with Huahong, effective guarantee of production capacity supply: the supply and demand of power semiconductors is expected to remain tight in 22 years. As the design customer of Huahong's maximum power devices, with the climbing of Huahong's 12 inch production capacity, the production capacity is expected to be effectively guaranteed; At the same time, the company has carried out risk batch verification of products with overseas chip foundry. A chip foundry in China has invested in the first project batch, and is expected to obtain capacity contribution in 22 years. In addition, in order to further strengthen the competitiveness of products, the company continued to promote the construction of sealing and testing production lines. In the past 21 years, the electric base integration of the subsidiary can meet the independent sealing and testing needs of nearly 40% of the company's products, and the newly established subsidiary Jinlan semiconductor promotes module research and development.
Investment suggestion: we expect that the net profit attributable to the parent company in 2022 / 23 / 24 will be RMB 544 / 7.47 / 1016 million respectively, and the corresponding current price (closing price on March 21, 2022) PE will be 50 / 37 / 27 times respectively. As one of the leaders of power devices in China, the company has rich products and outstanding brand strength. At present, it is continuously optimizing the product structure, and new products such as IGBT and SiC are progressing smoothly. At present, the tolerance of photovoltaic, automobile and other market scenarios continues to rise, and Chinese end customers are increasing domestic substitution, so the company ushers in the opportunity of rapid growth. Maintain a "recommended" rating.
Risk tip: cyclical fluctuation risk of the industry; The risk that the technical iteration is not as expected; Risks of capacity climbing and customer development falling short of expectations
