\u3000\u3 Guocheng Mining Co.Ltd(000688) 608 Bestechnic (Shanghai) Co.Ltd(688608) )
The share of old products is increased iteratively, and new products are emerging
The SOC Branding Trend of smart headphones is determined, and hengxuan continues to increase its share iteratively: recently released new products such as opponecox2, Huawei freebuds4e and glory earbud S3pro adopt hengxuan master control scheme. Glory earbud 3pro adopts the company’s new generation of bes2600 series chips, which is the first three in one chip integrating “Bluetooth + noise reduction + in ear detection” in the industry, promoting the further improvement of integration and value. In addition, a new generation of 2700 series flagship chips are expected to be launched with customers’ terminals in the first half of the year, promoting the improvement of the overall ASP of earphone chips; In terms of market share, the company’s TWS master chip was successfully introduced into overseas major customers last year, and the market share is expected to continue to increase.
Watch SOC is initially successful, and the new generation is expected to be in large quantities within the year: the company’s first generation watch SOC scheme has been introduced into Huawei GT3 / runner, Xiaomi watchs1 / color2 and vivo watch2 released in the second half of last year. This year’s second-generation watch SOC is a fully integrated single-chip scheme using 12NM advanced technology. At present, it has been designed in multiple clients and is expected to be mass produced and listed in the second half of the year. We expect that the company’s watch SOC is expected to replicate the successful path of twssoc in the future.
WiFi SOC chip has made a breakthrough from smart home / audio to WiFi connection chip: in the field of smart home / audio, products such as smart speaker soundjoy, smart panel and AI super sensor released at Huawei’s spring conference all use the company’s 2600 series second-generation smart home master chip, and more terminal products will be released in succession. In addition, the company has developed voice module components based on open source Hongmeng, which is expected to be applied in batch in household appliances such as air conditioners, refrigerators and washing machines. In the field of WiFi connection chip, the company’s WiFi 4 connection chip has been designed in multiple clients and is expected to be mass produced in the middle of the year. Higher performance wifi6 will launch multiple chips simultaneously, which is expected to be mass produced by the end of the year, and is expected to land on customers’ TVs, tablets, watches, IPC and other intelligent terminals.
Investment advice
Considering the negative impact of cost side price increase and epidemic situation on both ends of supply and demand, we adjusted the EPS forecast to 3.41/5.25/7.37 yuan in 2021 / 2022 / 2023 (the original forecast was 4.03/6.01/9.92 yuan), corresponding to 56.29/36.61/26.06 times of PE in 2021 / 2022 / 2023. Considering the company’s platform ability, from TWS headset to smart watch / audio, to smart home and WiFi SOC, the company continues to expand its application fields, continuously improve its share of competitive strength and maintain the “buy” rating.
Risk tips
The price rise of OEM and product iteration are lower than expected
