Amlogic (Shanghai) Co.Ltd(688099) q1 is not weaker than expected in the off-season, and the trend of high growth continues in the beginning of 2022

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Events

Amlogic (Shanghai) Co.Ltd(688099) released the performance forecast for the first quarter of 2022: it is expected to achieve an operating revenue of about 1.48 billion yuan in the first quarter of 2022, with a year-on-year increase of about 59.29%, a net profit attributable to the parent company of about 270 million yuan, with a year-on-year increase of about 201.80%, and a net profit attributable to the parent company of 256 million yuan after deduction, with a year-on-year increase of about 226.88%.

Key investment points

Q1 is not light in the off-season, and the company continues its high growth trend in the beginning of 2022

Compared with the operating revenue of 1.544 billion yuan and the net profit attributable to the parent company of 313 million yuan in Q4 in 2021, Q1 company showed only a slight decline month on month in 2022, with excellent performance exceeding expectations. At the beginning of 2022, the company continued its high growth trend, which mainly benefited from the good market demand in its industry segments. The company actively grasped market opportunities, strengthened market development and further expanded global market opportunities. At the same time, the company's long-term accumulated technical and product advantages, sustained market demand and achievements of multi-year strategic layout show that the shipment of Q1 chips increased steadily year-on-year in 2022, further consolidating and improving the company's market position.

Local aiot high-quality manufacturers join hands with global key customers to build an ecological environment

The company is committed to the research and development of multimedia intelligent terminal application processor chip. The specific products are subdivided into intelligent set-top box SOC chip, intelligent TV SOC chip, AI audio and video system terminal SOC chip, WiFi and Bluetooth chip and automotive electronic chip. Adhering to the international development strategy, after decades of development and accumulation, the company has become a leader in smart set-top box chips, a leader in smart TV chips and a pioneer in AI audio and video system terminal chips. Its business covers China, North America, Europe, Latin America, Russia, Asia Pacific, Africa and other major economic regions in the world.

The downstream customers of intelligent set-top box SOC include well-known manufacturers at home and abroad such as Zte Corporation(000063) , Skyworth, Xiaomi, Alibaba, Google, Amazon and Walmart. Relevant terminal products have been widely used in China Mobile, China Telecom Corporation Limited(601728) , China United Network Communications Limited(600050) and other Chinese operator equipment, as well as many overseas operator equipment in North America, Europe, Latin America, Asia Pacific, Russia and Africa.

Smart TV SOC and related applications include but are not limited to smart terminal products of well-known enterprises at home and abroad, such as Xiaomi, Haier, TCL, Skyworth, Jimi, fengmi, Ali, Tencent, Baidu, big eye orange, Anker, bestbuy, Toshiba, Amazon, Epson and so on.

AI audio and video system terminal SOC has been applied to the terminal products of many well-known enterprises at home and abroad, including but not limited to Xiaomi, Lenovo, TCL, Alibaba, Le Dong, Jifei, iqiyi, Google, SONOS, JBL, Harman Kardon, yandex, keep, zoom, picture, Marshall, etc.

WiFi Bluetooth chip and automotive electronic chip. In August 2021, the company launched a new generation of dual band high-speed data transmission wi-fi5 + BT5 that supports high-throughput video transmission 2 single chip and commercial scale has been realized. The company's automotive electronic products are mainly used in the on-board entertainment system. It has specially set up a V-series automotive electronic quality chip production line and adopted the industry-leading 12 nm manufacturing process. At present, the Lincoln car equipped with the company's on-board information and entertainment system chip has been on the road overseas. In addition, the company's smart cockpit chip is in the process of layout research and development.

We believe that the company, as a local aiot high-quality manufacturer, occupies a leading position in the field of intelligent set-top box, TV and AI audio and video, works with global high-quality customers to build an ecosystem and build the basic sector for the company's long-term development. At the same time, it actively cuts into new fields such as wireless connection and automotive electronics, enriches its product layout and opens up space for future growth.

Profit forecast

It is predicted that the company's revenue from 2021 to 2023 will be 4.778 billion yuan, 6.719 billion yuan and 8.589 billion yuan respectively, and its EPS will be 1.98, 2.87 and 3.85 yuan respectively. The corresponding PE of the current stock price will be 55, 38 and 28 times respectively, giving it a "recommended" investment rating.

Risk tips

The downside risk of industry prosperity, the risk that the progress of new products is less than expected, the risk of intensified industry competition, the risk of overseas policy changes, etc.

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