\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 27 Sino Wealth Electronic Ltd(300327) )
Core view
The company issued the annual report of 2021. In 2021, the company realized revenue of 1.705 billion yuan (+ 29.21%), net profit attributable to parent company of 371 million yuan (+ 77.00%), and net profit deducted from non attributable to parent company of 361 million yuan (+ 88.39%). The basic EPS is 1.20 yuan and the weighted average roe is 30.32%. The annual performance growth was mainly due to the year-on-year growth in the sales of AMOLED display driver chips and lithium battery management chips.
OLED business growth is strong, and its own technical advantages are expected to bring performance growth. In 2021, the growth rate of the company’s OLED display driver chip product line ranked first among all product lines, and the demand growth trend was obvious. At present, AMOLED display driver chips are mainly dominated by Taiwanese and Korean manufacturers, with the characteristics of large single product volume and low gross profit margin. The core technology owned by the company has certain advantages. At present, it mainly carries out market-oriented competition with Taiwan manufacturers. The company plans to launch AMOLED display driver chips that meet the market specifications of front-end brands, and the business of this sector can be expected in the future.
Home appliance MCU business has made steady progress, and the market share is expected to increase. In 2021, the company’s home appliance main control chip continued to maintain a high growth rate. At present, it has become the main choice of domestic MCU for white appliance manufacturers, and has expanded a certain overseas business. In the future, the company’s production capacity will limit certain performance growth, but with the further optimization of product portfolio and the certain increase of product price, the performance of the company’s home appliance MCU product line is expected to be further improved in the future.
The lithium battery management business has developed rapidly, and the product quality has been recognized one by one. The company began to develop lithium battery management chip in 2007, and has established cooperative relations with many manufacturers. As lithium battery management involves product safety, the customer verification process is more cautious. At present, the company’s products have been adopted by many manufacturers and are in the early stage of market expansion. Lithium battery management chip is widely used in 5g base station energy storage, electric bicycle, Siasun Robot&Automation Co.Ltd(300024) etc. the business is expected to achieve rapid growth in the future.
Profit forecast: from 2022 to 2024, we expect the company’s revenue to be RMB 2.06226723421 billion (+ 38.0% / 29.6% / 28.0%) respectively; The net profit attributable to the parent company was 493 / 631 / 769 million yuan (+ 33.1% / 27.9% / 21.8%). The latest closing price corresponding to PE is 57 / 45 / 37 times respectively. The company is deeply engaged in the field of MCU. Under the opportunity of the landing of vehicle specification products and the gradual increase of lithium battery management chips, the performance is expected to achieve sustained and rapid growth and maintain the “buy” rating.
Risk warning: capacity supply is less than expected; New product development is not as expected
