\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
[key points of investment]
In 2021, the company’s revenue and net profit attributable to the parent company increased by 57% and 195% respectively year-on-year. The company released the annual report of 2021. In the whole year, the company achieved a revenue of 1.5 billion yuan, a year-on-year increase of 56.9%, the net profit attributable to the parent was 410 million yuan, a year-on-year increase of 194.6%, the gross profit margin was 39.1%, a year-on-year increase of 13.8pct, the net profit attributable to the parent was 27.4%, a year-on-year improvement of 12.8pct, which was basically in line with expectations.
Affected by the delivery date of orders from major customers, the revenue of 21q4 company decreased slightly year-on-year. In 2021, the company’s operating revenue increased year-on-year, mainly due to the upward prosperity of the power semiconductor industry. The company continued to invest in R & D, carry out product technology iteration, develop and maintain supply chain resources, obtain more capacity support, and realize the simultaneous rise of volume and price of power devices. The operating revenue of 2021q4 company was RMB 400 million, with a year-on-year increase of 38.1% and a month on month decrease of 5.6%. The month on month decrease was slightly smaller. We think it may be affected by the delivery date of orders from major customers.
The product structure continues to improve, and R & D focuses on the medium and high-end market. The revenue of TMBT and MOS products increased by 2.79 billion yuan, representing a year-on-year increase of 2.79 billion yuan, and the revenue of SG and MOS products decreased significantly from 8.04 billion yuan to 20.25 billion yuan, a year-on-year increase of 2.79 billion yuan, accounting for 27.5% of the revenue of SG and MOS products. The company actively invested in research and development, and nearly 300 new products were added in 2021, of which 1) IGBT platform: 12 inch 1200V high-frequency low saturation voltage drop IGBT products have achieved mass production. The development of 650V high-density grooved gate IGBT using carrier storage technology has been preliminarily completed, and a number of IGBT Modules have entered small batch production; 2) Sj-mos platform: the fourth generation of deep trench sj-mos trench gate products have further completed the construction of 650V and 700V product platforms, and samples of the fifth generation sj-mos products have been produced; 3) Sgt-mos: the medium voltage p-type Sgt MOS platform has achieved mass production, and the number of low-voltage second-generation Sgt products has been increased to 18. In addition, the company has made new progress in research and development of trench MOS and third-generation power semiconductors.
The downstream customer structure was significantly optimized. In 2021, the company actively expanded middle and high-end industries such as automotive electronics, photovoltaic energy storage inverter, 5g base station power supply, industrial automation and high-end electric tools. In terms of automotive electronics, the company has achieved mass supply of more than a dozen products Byd Company Limited(002594) , and the company has also entered the whole machine parts factory of several automobile brands. In addition, the company focuses on the photovoltaic energy storage and inverter market. IGBT and MOS products have been sold in large quantities in major leading enterprises in China. This field may be the performance growth point of the company in 2022.
The ratio of management + R & D expenses increased month on month, and the net interest rate attributable to the parent decreased month on month. The gross profit margin of 21q4 company was 39.7%, increased by 12.2pct year-on-year, decreased by 2.3pct month on month, and the net profit attributable to the parent company was 25.0%, increased by 11.7pct year on year and decreased by 7.3pct month on month. 21q4 gross profit margin decreased month on month. We believe that it is the prosperity or pressure of medium and low-voltage products. The prices of some products of the company decreased compared with Q3. The month on month decrease of net profit attributable to the parent company exceeded the month on month decrease of gross profit margin, mainly due to the month on month increase of management expense rate and R & D expense rate by 2.7 and 4.0pct respectively.
[investment suggestions]
The company focuses on the R & D and sales of power semiconductor power devices. Due to the pressure on some downstream consumer electronics, we slightly reduce the forecast of revenue and net profit attributable to the parent company in 2022. The pressure on consumer electronics shipments in 2023 may be alleviated and the profit forecast for 2023 will be raised. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 2.02/26.3/33.4 billion, the net profit attributable to the parent company will be RMB 490 / 600 / 750 million and EPS will be RMB 341 / 4.21 / 5.26, The PE corresponding to the current share price is 44.95/36.38/29.14 times, giving the company an “overweight” rating.
[risk tips]
The industry competition intensifies, the prosperity of power semiconductors decreases, and the expansion of production capacity is less than expected.
