\u3000\u3 Guocheng Mining Co.Ltd(000688) Huatai Securities Co.Ltd(601688) 601)
Event: the company announced on March 28, 2022 that the net profit attributable to the parent company in 2022q1 was 58-68 million yuan, with a year-on-year increase of 140.59% – 182.07%. In 2022q1, the net profit deducted from non parent company was 53-63 million yuan, with a year-on-year increase of 147.80% – 194.56%, and the performance of 22q1 exceeded the market expectation.
Comments:
With the increase of customer share and the introduction of new products, the power management chip business grew rapidly. Focusing on the market and customer needs, the company continues to expand its R & D team, continuously increase R & D efforts, actively promote the improvement and upgrading of product lines, increase product categories and optimize product structure. The company’s LDO, OVP, TVs and other power chain chip markets have a good reputation. It has successively established good cooperative relations with well-known mobile phone brand customers at home and abroad, such as Samsung, LG, Xiaomi and customer A. in 2021, it will improve the original field and customer share and import new products.
The policy strongly promotes the landing of electronic detonators, and the business is expected to increase rapidly. The intelligent networking delay management chip developed by the company is mainly used in digital electronic detonators and other fields. Because electronic detonators have incomparable safety and control functions compared with traditional detonators, they have high safety coefficient and low social hazard coefficient, and are more suitable for the current development trend of blasting industry. In December 2018, the Ministry of public security and the Ministry of industry and information technology issued a notice requiring electronic detonators to reach the goal of full use in 2022. We believe that electronic detonators are expected to penetrate rapidly, and this business is expected to bring greater profit elasticity to the company.
Continue to expand categories and layout for long-term development. The funds raised and invested by the company are used for power conversion and drive chip R & D and industrialization, power protection and drive chip R & D and industrialization, R & D center construction and development reserve. The reserve projects include signal chain products, magnetic induction chips and PMU projects. With the increasingly complex functions of terminal products and the continuous improvement of safety requirements, the company further enhances the core competitiveness of the company through the continuous layout of power conversion and power protection projects. In addition, the company has actively invested in the research and development of automotive electronic chips. The company’s automotive chips include power management chips and tire pressure sensor operational amplifiers. At present, power management chips are mainly used in automotive front mounted entertainment systems, and products have been sold in small quantities.
Equity incentive shows confidence in long-term development. The company implemented equity incentive at the end of 2021. A total of restricted shares accounting for about 1% of the total share capital were granted to about 129 people. The assessment is based on 20 years, and the net profit growth rate from 21 to 23 years is no less than 100% / 160% / 240%, about 134 / 174 / 228 million yuan respectively, binding the interests of employees and demonstrating the confidence of long-term development.
Maintain the “buy” rating. The first quarter report of the company in 2022 exceeded the expectation. Considering the rapid growth of the company’s power chain products in the share of major customers, the electronic detonator business is expected to exceed the expectation, which drives the company’s annual profit in 2022 to exceed the expectation. We maintain the prediction of the company’s net profit of 160 million yuan in 2021 and increase the company’s net profit of 321 / 401 million yuan from 2022 to 2023, an increase of 47% / 31% compared with the previous time, corresponding to pe66 / 33 / 26x. Maintain the “buy” rating.
Risk tip: the epidemic repeatedly affects the prosperity of consumer electronics; The penetration progress of electronic detonator was lower than expected.
