\u3000\u3 Guocheng Mining Co.Ltd(000688) 099 Amlogic (Shanghai) Co.Ltd(688099) )
In 2022, the net profit deducted from Q1 increased by 226.88% year-on-year, and the performance growth exceeded expectations
The company released the performance forecast for the first quarter of 2022. It is expected to achieve an operating revenue of 1.48 billion yuan in 2022q1, with a year-on-year increase of 59.29%, a net profit attributable to the parent company of 270 million yuan, with a year-on-year increase of 201.80%, and a deduction of non net profit of 256 million yuan, with a year-on-year increase of 226.88%. The performance growth exceeded the expected period. Considering the high prosperity of downstream industries and the continuous acceleration of the company’s order expansion, we raised the company’s net profit attributable to the parent company from 2022 to 2023 to 12.73 (+ 11%) / 1.751 (+ 13%) billion yuan respectively, corresponding to EPS of 3.10 (+ 12%) / 4.26 (+ 13%) yuan / share from 2022 to 2023 respectively, and the current share price corresponding to PE is 35.0/25.4 times respectively, maintaining the “buy” rating.
The demand in downstream areas is booming, and new application terminals are gradually opened
The company’s performance in the first quarter of 2022 exceeded the expected growth mainly due to the stable growth of the shipments of terminal chips. In terms of smart set-top box chips, overseas Android set-top boxes are becoming more and more popular, and the market expansion is accelerating. In 2020, the scale of overseas Android set-top box market is $3.2 billion. According to the calculation of QYResearch data, it is estimated that in 2025, it will be about $12 billion, CAGR will reach 25%, and the overseas market will continue to accelerate its popularity. At the same time, compared with Broadcom, the company’s products have advantages in performance, cost performance, service and back-end support, and are constantly accelerating to seize the share of Broadcom; In terms of AI audio and video system terminal chips, the company’s aiotsoc benefited from the continuous recovery of the downstream consumer electronics market in 2021, and the shipment increased significantly. It is expected that in 2022, with the application expansion of new scenarios and the acceleration of overseas market demand, the relevant revenue will further increase; In terms of smart TV chips, the company explored new markets such as overseas customers and projectors. Since overseas companies were not affected by the epidemic, the relevant revenue increased steadily.
The scale effect has greatly boosted profitability, and WiFi and automotive electronics businesses are progressing smoothly
Under the influence of scale effect and active sales strategy, the profitability of 2022q1 company has been greatly improved. In 2022, with the further expansion of the company’s production capacity and the further rise of some prices under the tight balance of chips, the high profitability is expected to be maintained. The company’s WiFi Bluetooth chip has been mass-produced and commercially available. The next generation WiFi 6 chip is expected to be launched in 2022, and the adaptation range and speed are expected to be improved again. Driven by the continuous upgrading iteration of products, the company’s WiFi Bluetooth chip is accelerating its introduction into the market. At the same time, the company’s automotive electronic chips are mainly used for on-board entertainment screens, continue to obtain orders from overseas high-end customers, steadily increase shipments, and enter the field of intelligent cockpit, which can be expected in the future.
Risk warning: downstream demand is less than expected; Overseas market expansion was less than expected.
