\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
Recently, the company released its annual report for 2021: during the reporting period, the company achieved an operating revenue of 1.498 billion yuan, a year-on-year increase of 56.89%; The net profit attributable to the parent company was 410 million yuan, a year-on-year increase of 194.55%.
Key points supporting rating
The gross profit margin increased significantly and the performance increased significantly. The company achieved a revenue of 1.498 billion yuan in 2021, with a year-on-year increase of 56.89%; The net profit attributable to the parent company was 410 million yuan, with a year-on-year increase of 194.55%. The main reasons for the significant growth of performance are: the prosperity of power semiconductor is high, the product demand increases sharply, and the orders are full. At the same time, the company actively carries out R & D upgrading and product technology iteration, and the market structure, customer structure and product structure are continuously optimized. In terms of gross profit margin, the company’s gross profit margin in 2021 was 38.97%, a year-on-year increase of 13.73 percentage points. In terms of expense rate, the sales expense rate in 2021 was 1.39%, a year-on-year decrease of 0.06 percentage points; The rate of administrative expenses was 2.06%, a year-on-year decrease of 0.47 percentage points; The financial expense ratio was – 1.16%, a year-on-year decrease of 0.52 percentage points.
With the continuous optimization of product structure, new markets such as photovoltaic and automotive electronics are expected to become important performance growth points. The company continued to increase R & D investment and improve product series. In 2021, the R & D investment totaled 796892 million yuan, a year-on-year increase of 54.05%. In terms of product structure, the sales proportion of grooved power MOSFET was adjusted to 45.31% from 55.79% in the same period last year, and the proportion of Sgt MOSFET was increased to 38.96% from 31.69% in the same period last year. The sales revenue of IGBT products in 2021 was 805144 million yuan, a year-on-year increase of 529.44%, and the sales proportion was increased from 1.34% to 5.39%. In 2021, the company actively developed medium and high-end markets such as automotive electronics, photovoltaic inverter and photovoltaic energy storage. Automotive electronic products were imported into customers such as Byd Company Limited(002594) and the sales proportion increased rapidly. IGBT and MOSFET have achieved mass sales in major photovoltaic inverter energy storage enterprises in China.
Work closely with suppliers to ensure production capacity. The company’s chip OEM suppliers include Huahong Hongli, China Resources Shanghua and other major Chinese enterprises with large-size wafer chip OEM capabilities such as MOSFET and IGBT. The company has established a long-term strategic cooperative relationship with Huahong Hongli and has been put into production in Huahong Hongli plant 1, plant 2, plant 3 and plant 7. The company has become one of the semiconductor power device design companies with the largest chip investment of China’s 8-inch and 12 inch chip process platform, and the overall production capacity continues to grow. In addition, the company is also promoting cooperation with other suppliers at home and abroad to provide capacity supplement.
Valuation
Considering that the downstream demand is still good, adjust the company’s EPS for 22-24 years to 3.760/4.588/5.934 yuan, and the PE corresponding to the current share price is 43 / 36 / 28 times respectively, maintaining the overweight rating.
Main risks of rating
Customer promotion progress is lower than expected; The progress of domestic substitution is less than expected; The reserve of technical talents is less than expected.
