\u3000\u3 Shengda Resources Co.Ltd(000603) 893 Rockchip Electronics Co.Ltd(603893) )
Event: Rockchip Electronics Co.Ltd(603893) released the 2021 annual report, which showed that the company achieved an operating revenue of 2.719 billion in 2021, a year-on-year increase of 45.90%, and a net profit attributable to the parent company of 602 million, a year-on-year increase of 88.07%.
Aiot continues to grow at a high speed, and SOC leaders are expected to benefit significantly. With the promotion of 5g network construction and the continuous implementation of intelligent application scenarios, the aiot market is entering a rapid growth cycle. IDC predicts that the global Internet of things expenditure will reach US $754.28 billion in 2021 and is expected to reach US $1.2 trillion in 2025, with a five-year (20212025) compound growth rate (CAGR) of 11.4%. Rockchip Electronics Co.Ltd(603893) , as the role of water seller in the industry, its product series covers audio and video processing SOC, power management, wireless connection and other chips, which can provide a platform based overall solution for many fragmented aiot players, and is expected to significantly benefit from the growing aiot market.
3588 was launched as scheduled, and the market prospect should not be underestimated. In 2021, the company released its flagship high-end aiot chip 3588 series as scheduled, further consolidating the layout of the company’s aiot product line, indicating that the company’s technology R & D capability has been further improved. It is expected that rk3588 series is currently the top equipped high-end aiot chip in China, and is expected to be applied to many markets, such as armpc, tablet, high-end camera, NVR, 8K and large screen equipment, automotive intelligent cockpit, cloud service equipment and edge computing, AR / VR and so on.
Continue to increase R & D investment and consolidate the foundation for long-term growth. For asset light IC design companies, high-intensity R & D is an important factor for the company’s long-term development. In 2021, Rockchip Electronics Co.Ltd(603893) R & D investment was 561 million, accounting for 20.63% of operating revenue, with a year-on-year increase of 49.03%. At the same time, R & D personnel also increased significantly. With the company’s large R & D investment over the years, its product category and market position are expected to rise to a higher level.
Profit forecast and investment rating: give buy rating. It is estimated that the net profit attributable to the parent company will be RMB 827 million, RMB 1107 million and RMB 1397 million from 2022 to 2024, and the current market value corresponding to PE is 49.13, 36.72 and 29.09 times respectively. Considering the growth opportunities of aiot industry in the next few years and the leading industry position of the company in China’s SOC field, the company is given a buy in rating.
Risk tips:
1) the global epidemic spread exceeded expectations; 2) Market promotion is not as expected; 3) The R & D of new products is less than expected; 4) Insufficient wafer manufacturing and packaging capacity.
