\u3000\u3 Guocheng Mining Co.Ltd(000688) 099 Amlogic (Shanghai) Co.Ltd(688099) )
Event:
On April 8, 2022, the company issued the voluntary disclosure announcement of performance forecast for the first quarter of 2022.
Comments:
22q1 performance exceeded expectations. 22q1 operating income was about 1.48 billion yuan, with a year-on-year increase of about 59.29%; The net profit attributable to the parent company was about 270 million yuan, with a year-on-year increase of 201.80% and a net interest rate of 18%; The net profit deducted from non parent company was about 256 million yuan, with a year-on-year increase of about 226.88%, and the net interest rate deducted was 17.3%. Compared with 21q4’s revenue of 1.545 billion yuan, net profit of 312 million yuan and net profit of 286 million yuan deducted from non parent company, the company’s off-season performance of 22q1 is close to that of 21q4 peak season. We are optimistic about the growth trend of Amlogic (Shanghai) Co.Ltd(688099) 2022 and the future.
With multi-point flowering, the business at home and abroad is progressing smoothly and has broad growth space. While consolidating the Chinese market, the company vigorously expands the overseas market. In 2020, the global market of smart set-top box SOC chips, smart TV SOC chips, Wi Fi and Bluetooth chips shipped about 350 million, 250 million and 3.2 billion pieces respectively, Amlogic (Shanghai) Co.Ltd(688099) shipments were about 57.89 million, 29.08 million and 30000 pieces, accounting for only 16%, 12% and less than 1% of the global market; The global market space of the three product lines is about US $3.5 billion, US $1.3 billion and US $20 billion respectively, with a total of about US $25 billion. Compared with the current revenue volume of Jingchen, there is huge room for growth in the future.
SoC chip of intelligent set top box: the overseas market has accelerated and the market share in China has increased. After years of continuous innovation and upgrading, the company’s series products facing the Chinese operator market have obvious advantages in product performance and stability; A series of products for overseas operator markets have been certified by Google and several international mainstream conditional access systems (CAS) to support AV1 decoding; There are many types of series products for non operator customers outside China, covering high, medium and low markets according to the needs of different customers and markets for product performance and process technology. The company’s smart set-top box chip scheme has been widely adopted by 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 chip: continue to launch leading products, which are widely used by downstream customers. 2K Full HD high cost performance series products support 4K Ultra HD decoding and ultra-high system integration; 4K UHD series products support 8K UHD decoding, far-field voice and Dolby sound effect; High end products have built-in neural network processor, support far-field voice upgrade and Dolby horizon, and support image quality optimization technology based on artificial intelligence. The company’s smart TV chip solution has been widely used in smart TV, projector and other fields. Relevant applications include but are not limited to the 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, best buy, Toshiba, Amazon, Epson and so on. In the future, it will continue to launch new products to further expand the incremental market and customers.
AI audio and video terminal chip: diversified application scenarios and embracing the global ecology of aiot. The company’s chip solutions have a variety of application scenarios, including but not limited to smart home (smart speaker, smart doorbell, smart image), smart office (smart conference system), smart fitness (treadmill, spinning bike, fitness mirror), smart home appliances (floor sweeping Siasun Robot&Automation Co.Ltd(300024) , refrigerator), UAV (smart agricultural UAV), smart business (face brushing payment, advertising machine) Intelligent terminal analysis box (Rookie storage, post station back-end analysis box), intelligent singing (k song on demand machine) and other fields. The company’s chips have been applied to the terminal products of many well-known enterprises at home and abroad, including but not limited to Xiaomi, Lenovo, TCL, Alibaba, Ledong, Jifei, iqiyi, Google, SONOS, JBL, Harman Kardon, yandex, keep, zoom, picture, Marshall, etc.
WiFi Bluetooth chip: continue to make technological breakthroughs and improve the product matrix. Since the mass production of 20q3, the company has steadily promoted its commercialization process and continuously carried out technical optimization and upgrading. In August 2021, the company launched the first dual band high-speed data transmission Wi Fi 5 + Bt 5.2 single chip independently developed to support high throughput video transmission, which can be sold in cooperation with the company’s SOC main chip to optimize the product portfolio. The launch of this product has laid a solid foundation for the launch of the company’s next-generation WiFi Bluetooth chip.
Automotive electronic chip: cooperate with high-end customers to develop intelligent cockpit system. In 2020, the company made positive progress in cooperation with overseas high-end and high-value customers and received some customer orders. In the first half of the year, the company continued to invest in the field of automotive electronic chips, and the sales of automotive electronic chips increased steadily in the first half of the year. At present, such chips are mainly used in on-board information and entertainment systems. The products adopt the industry-leading 12 nm process technology, with built-in neural network processor, support graphics, video, image processing and far-field voice functions, support AV1 decoding, and meet the requirements of vehicle regulations.
Earnings forecast, valuation and rating. According to the company’s performance express in 2021, we adjusted the company’s revenue and net profit in 2021 to 4.778 billion yuan and 814 million yuan. We believe that the large volume of overseas business, the recovery of business demand in China and the price rise caused by tight supply and demand jointly drive the high growth of Jingchen’s performance in the future. We revised the net profit attributable to the parent company in 2022 and 2023 to 1.212 billion yuan (+ 20%) and 1.590 billion yuan (22%), which were originally predicted to be 1.008 billion yuan and 1.302 billion yuan. We expect the company’s revenue from 2021 to 2023 to be RMB 47.78/65.33/85.30 billion respectively, and the net profit attributable to the parent company to be RMB 814/12.12/1.590 billion respectively. The current market value corresponding to PE is 58 / 39 / 30 times respectively. Maintain the “buy” rating.
Risk tip: the overseas shipment of set-top box chips is less than expected, and the R & D Progress of Wi Fi chips is less than expected.
