\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Core view
Event: the company released the performance forecast of Q1 in 2021. In Q1 in 2021, the revenue was 750820 million yuan (+ 49.40-63.34%), the net profit attributable to parent company was 195250 million yuan (+ 125.72-189.38%), and the net profit deducted from non attributable to parent company was 190245 million yuan (+ 166.87-244.12%).
Benefiting from the strong demand for downstream applications, the company's performance has increased significantly. The company is the first 100 million gate FPGA manufacturer to launch the 28nm process in China. At present, there is a strong demand for downstream applications. The company continues to strengthen capacity guarantee, which provides a solid foundation for continuous business growth. The revenue of four product lines, safety and identification, nonvolatile memory, smart meter chip and FPGA, has increased to varying degrees. Q1 is relatively off-season, so it is estimated that the revenue in 2022 will exceed expectations.
Benefiting from the price rise and new product launch, the comprehensive gross profit margin increased significantly. Benefiting from the introduction of new products and the increase of unit prices of some products, the comprehensive gross profit margin increased by 12.95 percentage points over the previous year. From the whole year of last year, the gross profit margin in 2021 was 59%, an increase of 13 percentage points over the previous year.
Continue to pay attention to R & D investment and broaden the technological moat. The employee compensation (including employee shares) of the company's R & D personnel in the first quarter increased compared with the previous period. From the whole year of last year, the company's R & D expenses in 2021 were 691 million yuan, a year-on-year increase of 40.99%, the R & D expense rate was 26.8%, and the net profit rate was 21.7%. The fluctuation of R & D expenses still had a great impact on the net profit.
In the future, the further volume of military, 5g base stations and automotive electronics will drive the continuous high growth of performance. Most military electronic devices have strong demand for FPGA, but Xilinx and Intel account for 83% of the total market. At present, due to the independent and controllable demand, the demand for domestic substitutes in the military field has increased significantly, and Chinese enterprises are facing historical opportunities. 5g base station is still in the early stage of laying, and the signal attenuation of 5g base station is faster than that of 4G base station. The demand of 5g base station will increase significantly compared with that of 4G period. It is estimated that there will be nearly 10 billion market increment of FPGA in China's communication field in the next few years. With the surge in the number of automotive sensors, the demand for computing power is also growing geometrically. As an important part of ADAS solution, FPGA penetration will also continue to increase.
Profit forecast: we predict that from 2022 to 2024, the company's revenue will be increased to RMB 3.563/45.72/5.828 billion (+ 38.2% / 28.3% / 27.5%); The net profit attributable to the parent company was 693 / 896 / 1095 million yuan (+ 34.6% / 29.4% / 22.2%). The latest closing price corresponding to PE is 62 / 48 / 39 times respectively. The company is deeply engaged in the field of FPGA and storage. With strong downstream demand, the performance is expected to achieve sustained and rapid growth and maintain the "buy" rating.
Risk warning: the market demand is less than expected; New product development is not as expected
