\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Event: on March 21, 2021, the company released its annual report for 2021. In 2021, the company achieved a revenue of 2.577 billion yuan, a year-on-year increase of 52.42%; The net profit attributable to the parent company was 514 million yuan, a year-on-year increase of 287.2%; The net profit attributable to the parent company after non deduction was 444 million yuan, a year-on-year increase of 101388%.
The whole product line has grown rapidly and its profitability has been greatly improved Shanghai Fudan Microelectronics Group Co.Ltd(688385) product line covers four categories of products: security and identification, nonvolatile memory, smart meter chip and FPGA, and provides chip testing services for customers through Hualing Co., Ltd., a holding subsidiary. In 2021, benefiting from the growth of downstream demand and the high outlook of the industry, the company’s product lines achieved rapid growth in revenue and significant increase in gross profit margin. In 2021, the company’s comprehensive gross profit margin reached 58.91% (YoY + 12.95pct). Specifically, in 2021, the company’s security and identification chip business achieved a revenue of 866 million yuan (YoY + 42.19%) and a gross profit margin of 51.07% (YoY + 17.05pct); The revenue of nonvolatile memory is 721 million yuan (YoY + 41.56%), and the gross profit margin is 55.65% (YoY + 10.32pct); The revenue of smart meter chip is 296 million yuan (YoY + 64.18%), and the gross profit margin is 56.60% (YoY + 22.79pct); FPGA and other chips realized a revenue of 427 million yuan (YoY + 109.49%) and a gross profit margin of 84.71% (YoY + 2.61pct).
FPGA is fast and large-scale, leading in technology, and has great prospects. The company is one of the leading companies in the field of FPGA technology in China. At present, it can provide a series of products such as tens of millions of gate level, 100 million gate level FPGA chips and embedded programmable chips (PSoC). The company is the first manufacturer to launch 100 million gate FPGA products in China. In Q2, 2018, the company took the lead in launching 28 nm 100 million gate FPGA products, which were officially sold in 2019. In 2020, the sales exceeded 100 million yuan, and continued to expand rapidly in 2021. By the end of 2021, it had sold relevant FPGA products based on 28 nm to more than 300 customers. At the same time, the company has the first PSoC to be introduced to the market in China. This product can meet the needs of application fields such as high-speed communication, signal processing, image processing and industrial control, and the market response is good. At present, the company is actively developing a new generation of 1 billion gate level products based on 14 / 16nm process, further enriching the types of FPGA and PSoC chips in 28nm process, and maintaining the leading technology of domestic FPGA.
We will continue to pay attention to R & D investment, and automotive electronics will blossom at multiple points. The company adheres to technological innovation and maintains a high level of R & D investment for a long time. In 2021, the company invested 749 million yuan in R & D, accounting for 29.06% of revenue. In addition, the company has blossomed in many aspects in the automotive electronic business. The fm1280 chip of smart card and security chip and the FM17 series reading and writing series of smart device chip have passed aec-q100 certification, making breakthroughs in the fields of automotive Tbox security chip and digital key; Nonvolatile memory has also entered mass production in the field of automotive electronics; In terms of MCU chip, the company released LG series MCU in December 2021, which has obtained aec-q100 certification. The target application fields include vehicle wiper, window, seat, door lock, air conditioner, electronic shifter, etc.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 22, 23 and 24 years is RMB 683, 905 and 1183 million respectively, and the corresponding current price PE is 56, 42 and 32 times respectively. The company is a leading multi product line IC design company in China. The FPGA business is in the leading technology in China and in the stage of rapid growth. It is covered for the first time and is rated as “recommended”.
Risk warning: the risk of downstream market fluctuation; Risk of upstream supply fluctuation; The risk of intensified market competition; The risk that the R & D Progress of new products is less than expected; Risks of attracting talents and maintaining innovation ability.
