\u3000\u3 Guocheng Mining Co.Ltd(000688) 521 Verisilicon Microelectronics (Shanghai) Co.Ltd(688521) )
On March 29, Verisilicon Microelectronics (Shanghai) Co.Ltd(688521) released the annual report of 2021. The company achieved a revenue of 2.139 billion yuan in 2021, a year-on-year increase of 42.04%; The net profit attributable to the parent company was 13 million yuan, turning losses into profits. Corresponding to the fourth quarter, the company achieved a revenue of 618 million yuan, a year-on-year increase of 38.86% and a month on month decrease of 4.58%; The net profit attributable to the parent company was 35 million yuan, a year-on-year decrease of 41.48% and a month on month increase of 47.34%.
The semiconductor IP authorization business has grown steadily, and the scale effect of chip customization business is prominent. Relying on independent semiconductor IP, the company provides customers with one-stop chip customization services and semiconductor IP authorization services. In 2021, benefiting from the growth of downstream demand and the high outlook of the industry, all business lines of the company grew steadily, especially the scale effect of chip customization business was prominent, and the revenue achieved rapid growth. Specifically, (1) in 2021, the company’s semiconductor IP authorization service business achieved a revenue of 706 million yuan, yoy + 20.81%; Among them, the income from intellectual property licensing fee is 610 million yuan, yoy + 21.00%, and the income from royalties is 96 million yuan, yoy + 19.63%. (2) In 2021, the one-stop chip customization business achieved a revenue of 1.433 billion yuan, yoy + 55.51%; Among them, the revenue of chip design business is 548 million yuan, yoy + 104.48%, and the revenue of mass production business is 885 million yuan, yoy + 35.40%.
The income structure is continuously optimized, and there are sufficient projects to be mass produced. In 2021, the revenue structure of the company has been continuously optimized, with a total revenue share of 56.32% in the field of consumer electronics and the Internet of things, a year-on-year decrease of 9.58ppts. However, the revenue of the company in the three downstream industries of data processing, computer and peripheral, and automotive electronics has increased rapidly, and the revenue share has increased rapidly. Meanwhile, in 2021, the company’s revenue from customers such as system manufacturers, large Internet companies and cloud service providers accounted for 36.21%, an increase of 3.55 ppts year-on-year. In addition, the number of mass production and shipment chips for the company’s revenue reached 112, all from the company’s own design service projects. The order to shipment ratio of mass production business has always maintained a high level. Another 45 chip design projects are to be mass produced, which can inject strong impetus into the company’s growth after the formation of revenue.
Continue to increase R & D investment, and the proportion of revenue of advanced process nodes continues to increase. The company adheres to technological innovation and maintains a high level of R & D investment for a long time. In 2021, the company invested 690 million yuan in R & D, accounting for 32.26% of revenue. Among them, the company has completed the development of the second-generation data center video transcoding platform based on Xinyuan’s independent IP. The platform has enhanced the video transcoding capacity to 8K and added AI processing capacity; The high-end application processor platform has been successfully streamed, the design and development of engineering demonstration prototype have been completed, and the iterative research and development of chiplet scheme will be promoted this year; TWS Bluetooth connection platform has entered the internal test stage; The company’s newly developed display processor IP supports high dynamic range video and image processing; The company’s image signal processor IP has obtained the certification of automobile functional safety standard iso26262, accelerating the strategic layout in the field of electric vehicles and intelligent vehicles. In terms of advanced semiconductor process nodes, in 2021, the company’s process node revenue of 14nm and below accounted for more than 70%, and the process node revenue of 7Nm and below accounted for about 50%. The revenue of high-level process projects continued to increase, promoting the rapid growth of the company’s revenue.
Investment suggestion: we predict that the net profit attributable to the parent company in 22 / 23 / 24 is expected to reach 124 / 247 / 363 million yuan, corresponding to 195 / 98 / 66 times of PE in 22 / 23 / 24. The company is a world-famous one-stop chip customization service and semiconductor IP licensing service enterprise, which has strong scarcity, strong synergy of business model, scale effect has appeared, and maintains the “recommended” rating.
Risk warning: downstream demand is less than expected; Upstream capacity supply is limited; Market competition intensifies.
