Changsha Jingjia Microelectronics Co.Ltd(300474) company's brief review report: expand government system business, and 9-series chips continue to be sold in large quantities

\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 74 Changsha Jingjia Microelectronics Co.Ltd(300474) )

Event: on March 17, Changsha Jingjia Microelectronics Co.Ltd(300474) issued an announcement and signed a strategic cooperation agreement with a company. The two sides will make full use of their respective advantages to jointly research and develop special PC equipment and server equipment for public security and develop industrial solutions based on independent security system. On the same day, a company reached an agreement with Changsha Jingjia Microelectronics Co.Ltd(300474) to purchase 100000 high-performance graphics processing chips and graphics cards from Changsha Jingjia Microelectronics Co.Ltd(300474) .

The performance forecast exceeded expectations, led by products in the field of chips and graphics display and control. In the performance forecast for 2021 released on January 10, the company disclosed that in 2021, the company realized revenue of 1.08-1.2 billion yuan (+ 65.20% - 83.55%), net profit attributable to parent company of 270320 million yuan (+ 30.27% - 54.39%), and net profit deducted from non attributable to parent company of 241291 million yuan (+ 101388%). The basic EPS is 0.9-1.06 yuan (+ 101388%). The performance achieved a large increase year-on-year, mainly due to the substantial growth of product sales in the field of chips and the stable year-on-year growth of product sales in the field of graphic display and control.

Cut into the market of government departments and is expected to expand new business areas in the future. Party A, which has reached cooperation with the company this time, has more than 20 years of experience in public security information construction and has long-term business cooperation with public security departments in many provinces and cities across the country. The company will be responsible for providing technical documents, development manuals and other technical materials of GPU and graphics card, and arranging technicians to cooperate with Party A in the design, implementation, adaptation and testing of security functions of public security dedicated PC, server and industry solutions. Cooperation with Party A marks the company's formal entry into the market of government departments. Due to the huge market scale of government departments, relevant businesses are expected to usher in better development opportunities in the future.

9 series chips won 100000 large orders, and the substitution of domestic GPU accelerated. According to the company's announcement on March 17, the company will provide Party A with high-performance graphics processing chips (9 Series) and graphics card products, which can meet the needs of high-performance display and artificial intelligence calculation such as geographic information system, media processing, CAD aided design, games and virtualization. The conclusion of this agreement will have a positive impact on the development of the company in the general market, marking that the company's 9-series chips have been recognized by the market. At present, the voice of domestic GPU substitution continues to rise, and there is strong demand in key areas related to national defense and security. With the company's entry into the public security equipment market and general market, its future performance is expected to continue to grow rapidly.

Profit forecast: from 2021 to 2023, we expect the company's revenue to be RMB 1.162/18.36/2.860 billion (+ 77.8% / 58.0% / 55.7%) respectively; The net profit attributable to the parent company was 311 / 464 / 596 million yuan (+ 49.7% / 49.4% / 28.4%). The latest closing price corresponding to PE is 105 / 70 / 55 times respectively. The company is deeply engaged in the field of GPU. Under the background of continuous improvement of computing power requirements such as East digital West computing and Internet of all things, it is expected to achieve sustained and rapid growth, cover for the first time and give a "buy" rating.

Risk warning: the customer import is not as expected; The product landing was not as expected.

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