\u3000\u3 Guocheng Mining Co.Ltd(000688) 008 Montage Technology Co.Ltd(688008) )
International leading data processing and interconnection chip design company Montage Technology Co.Ltd(688008) was founded in 2004 and is committed to providing high-performance and low-power chip solutions in the field of cloud computing and artificial intelligence. At present, its main business includes interconnection chips. The company has successively established stable business cooperation relations with Intel and Samsung and obtained investment support.
The memory upgrade drives the price of memory interface chips to rise, and the supporting chips bring incremental space. The gradual implementation of high traffic application scenarios requires higher server performance, and processor manufacturers have successively launched new platforms, marking that ddr5 begins to replace DDR4, which will increase the unit price of memory interface chips. At the same time, the introduction of supporting chips will also bring incremental space. We expect that the market scale of memory interface and supporting chips will be close to RMB 8.7 billion in 2023, 1.8 times that in 2021 Montage Technology Co.Ltd(688008) is one of the first enterprises to launch relevant solutions, and will fully enjoy the dividends of opening up the industry space.
Jinchuan server and retimer broaden the revenue boundary. The third-generation Jinchuan server released by the company has four security features, which are suitable for industries and fields with high hardware security requirements. After cultivating related party transactions in the early stage, the company has made a breakthrough of about RMB 2.5 billion in the market in 2022. As I / O bandwidth demand switching enters a critical period, the industry accelerates to pcie4 0 + switching, which will drive the growth of retimer chip market from zero to US $700 million in 2025. The company is one of the three enterprises with mass production capacity in this field.
Investment advice. We expect that the company will fully benefit from the long-term opportunities brought by the improvement of ddr5 penetration, and new businesses such as retimer are also expected to grow rapidly in this round of PC / server hardware upgrade. It is estimated that from 2021 to 2023, the company will achieve revenue of RMB 2.562/4.185/5.783 billion respectively, net profit attributable to parent company of RMB 830/1.508/2.142 billion respectively, corresponding EPS of RMB 0.73/1.33/1.89 respectively, and corresponding PE of current stock price of 102 / 56 / 39 times respectively. Based on the segment valuation method, with reference to the overall valuation level of comparable listed companies and semiconductor industry, the chip business is given 65-70 times PE in 2022, with the corresponding market value range of 94.3-101.5 billion yuan; With reference to its gross profit margin and server manufacturers, Jinchuan server business will be given 1.5 times PS in 2022, with a corresponding market value of about 2.3 billion yuan. The total target market value of the company is 96.6-103.8 billion yuan, corresponding to a reasonable price range of 85.26-91.62 yuan at the end of 2022. We are optimistic about the market potential of the company in this round of hardware upgrading, cover it for the first time, and give a “recommended” rating.
Risk tip: market expansion is less than expected, demand is less than expected, and industry competition intensifies.
