\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 27 Sino Wealth Electronic Ltd(300327) )
Key investment points
Performance summary: in 2021, the company achieved an operating revenue of 1.49 billion yuan, a year-on-year increase of 47.6%; The profit attributable to the parent company was 370 million yuan, a year-on-year increase of 77.0%.
A number of businesses have increased significantly, and the company's performance has grown rapidly. 2021: 1) revenue side: industrial control chip (including home appliance control, motor control and lithium battery management) / consumer electronics business (including computer peripherals and Internet of things, AMOLED display driver and PMOLED display driver) achieved revenue of RMB 1.17/330 billion respectively, accounting for 78.1% / 21.9% respectively, and + 36.8% / + 105.7% year-on-year respectively. 2) Profit side: the gross profit margin / net profit margin of the company were 47.4% / 24.8%, respectively + 6.8pp / + 5.0pp year-on-year. 3) Expense side: the company's sales / management / R & D expense rates are 1.3% / 31.% respectively/ 17.7%, respectively - 0.5pp / - 0.7pp / + 0.6pp year-on-year.
The company focuses on the layout of lithium battery management chips, with strong demand + capacity tilt driving long-term performance. The company has been deeply engaged in the field of lithium battery management for many years, and its products include smart terminal (mobile phone, laptop, wearable, etc.) and power terminal (power lithium battery for electric bicycle, sweeping Siasun Robot&Automation Co.Ltd(300024) and other applications). In 2021, the company's lithium battery management chip made a breakthrough in the promotion and mass production of Chinese head mobile phone customers, and the sales growth nearly doubled. In the future, the company is expected to deepen the layout of lithium batteries. Under the background of increasing domestic supply demand and the trend of electric bicycle replacement, the company will expand mobile phone customers and horizontally promote the laptop business. The lithium battery management business is expected to continue to grow at a high speed.
Domestic substitution accelerated, and the share of home appliance MCU looked stable. In 2021, under the background of global MCU shortage and the transfer of production capacity from international manufacturers to automobiles, the company achieved a mass production breakthrough in the field of variable frequency household power and increased the market share of white power. The domestic substitution of home appliance MCU is expected to accelerate in the future. The company is expected to further improve its market share and profitability with its stable customer base, continuously upgraded technology and its own structural optimization.
Domestic substitution + increasing production and reducing cost, AMOLED display chip has strong power. The penetration rate of AMOLED display screen has increased. Cinno predicts that the scale of OLED driver chips in China will increase from US $900 million in 2021 to US $3.3 billion in 2025 with a CAGR of 38%, but the localization rate of OLED driver chips in 2021 is still less than 10%. In 2021, the company's new FHD + products of AMOLED display driver chips were mass produced in many panel factories, and the market share increased significantly. With the increase of the company's 12 inch wafer production capacity + the decrease of the cost, it is expected that the company's AMOLED display driver chips will maintain a high growth rate in the next five years, and the sales are expected to grow several times.
Profit forecast and investment suggestions. It is estimated that in 22-24 years, the company's EPS will be 1.62/2.12/2.56 yuan respectively. Considering the company's stable position in household appliance MCU and the accelerated volume of lithium battery management chip and display chip, the company is given a 45 times PE valuation in 2022, corresponding to the target price of 72.90 yuan, maintaining the "buy" rating.
Risk warning: downstream customer expansion is less than expected risk; Risk that the production capacity is lower than expected; Competition increases risk.
