\u3000\u3 Shengda Resources Co.Ltd(000603) 290 Starpower Semiconductor Ltd(603290) )
Matters:
The company released its annual report for 2021. In 2021, the company achieved a revenue of 1.707 billion yuan, a year-on-year increase of 77.22%; The net profit attributable to shareholders of listed companies was 398 million yuan, a year-on-year increase of 120.49%. The company plans to distribute a cash dividend of 7.01 yuan (including tax) to all shareholders for every 10 shares.
Ping An View:
The annual performance is bright, and the leading style of IGBT remains: in 2021, the company achieved a revenue of 1.707 billion yuan (+ 77.22% YoY), a net profit attributable to the parent of 398 million yuan (+ 120.49% YoY), and a net profit not attributable to the parent of 378 million yuan (+ 143.27% YoY). The overall gross profit margin and net profit margin of the company are 36.73% (+ 5.17pct YoY) and 23.40% (+ 4.60pct YoY) respectively, and the weighted average return on net assets is 24.71% (+ 7.40pct YoY). In the single quarter of 2021q4, the revenue was 510 million yuan (+ 72.94% YoY, + 6.70% QoQ), and the net profit attributable to the parent was 132 million yuan (+ 183.22% YoY, + 16.81% QoQ). The gross profit margin and net profit margin in the single quarter were 40.81% (+ 4.97% QoQ) and 25.84% (+ 2.14% QoQ), respectively, a record high. The company seized the double opportunities of high industry prosperity and domestic substitution, and its products continued to make breakthroughs in downstream industries, especially in new energy vehicles, photovoltaic power generation, wind power generation and other industries. Its operating revenue achieved rapid growth, highlighting the leading style of IGBT. In terms of revenue structure, all sub sectors have achieved steady growth: the operating revenue of industrial control and power supply industry is 1.064 billion yuan (+ 50.60% YoY); The operating revenue of the new energy industry was 571 million yuan (+ 165.95% YoY); The operating revenue of frequency conversion white appliances and other industries was 60 million yuan (+ 59.48% YoY). From the expense side, the company’s period expense rate in 2021 was 10.76% (- 1.28pct YoY), which decreased steadily. The sales expense rate, management expense rate, financial expense rate and R & D expense rate were 1.43% (- 0.12pctyoy), 3.02% (+ 0.39pct YoY), – 0.15% (- 0.01pct YoY) and 6.46% (- 1.54pct YoY) respectively.
“Carbon neutrality” promotes the vigorous development of the new energy industry, and the gap between supply and demand helps the company’s performance enter the fast lane: in 2021, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles reached 352100, an increase of 157.57% year-on-year. The rise in both volume and price is expected to make new energy vehicles the main driving force for future market growth. Jibang consulting predicts that by the middle of 2025, the market scale of IGBT for Shanxi Guoxin Energy Corporation Limited(600617) vehicles will reach 21 billion yuan, totaling 31 billion yuan with IGBT for charging pile. According to the optimistic prediction of CPIA, the new installed capacity of PV in China will reach 110gw in 2025, and the CAGR will be about 18% from 2020 to 2025. The company seized the opportunity of shortage in the industry and continued to develop the new energy industry, driving its revenue share to continue to increase. In 2021, the company’s vehicle specification level IGBT module applied to the main motor controller continued to increase in volume, supporting more than Shanghai Pudong Development Bank Co.Ltd(600000) new energy vehicles in total, including more than 150000 class A and above models. At the same time, the share of power devices in vehicle air conditioning, charging pile, electronic power steering, etc. further increased, and began to support the overseas market in large quantities. In the field of photovoltaic power generation, the company uses its own 650V / 1200vigbt and FRD chip modules and discrete devices to be installed in large quantities in China’s mainstream photovoltaic inverter customers. It is expected that the market share will continue to increase in 2022.
Take measures to actively guarantee the production capacity and raise funds to increase the high-voltage IGBT and SiC: the company actively purchases equipment to expand the sealing and testing production capacity, deeply binds with Huahong in terms of chip OEM, and gradually transfers to Huahong Hongli 12 inch wafer. The 1200V and 1700V IGBT chips based on the sixth generation trench field stop technology of the company have achieved mass production on the 12 inch production line, and the output of 12 inch IGBT chips has increased rapidly. As a leader in China, the company has the advantages of scale and discourse power to strive for greater production capacity in Huahong. At the same time, the company’s fixed increase of 3.5 billion will be implemented. After the project is completed, it is expected to form an annual production capacity of 300000 pieces of 6-inch high-voltage characteristic process power chips and 60000 pieces of 6-inch SiC chips. On the one hand, it will break through the capacity limit, on the other hand, it will enrich the product types and application fields. The company will continue to increase R & D investment, accumulate product and technical advantages, continuously develop high value-added products with market competitiveness, optimize product structure and continuously improve its core competitiveness.
Investment suggestion: as a leading enterprise in the field of IGBT in China, the company is the only Chinese enterprise among the top ten in the global IGBT module market. At the same time, it has broken through the technical difficulties of IGBT chip with independent R & D and innovation, and has the ability to replace similar foreign products. Relying on its core competitiveness, the company’s performance in 2021 grew rapidly and entered the fast lane of growth. In the future, it will continue to benefit from the growth dividends of new energy vehicles, photovoltaic wind power storage and other industries, superimposed with the acceleration of domestic substitution process, and the profit expectation is relatively certain. Therefore, we raised the company’s profit expectation. It is estimated that the company’s net profit from 2022 to 2024 will be 592 million yuan (the previous value is 459 million yuan), 842 million yuan (the previous value is 604 million yuan), 1113 million yuan (New), and EPS will be 347 yuan, 494 yuan and 653 yuan respectively, corresponding to PE on April 8 of 100.2x, 70.4x and 53.3x respectively, maintaining the company’s “recommended” rating.
Risk tips: (1) downside risk of industry prosperity: the company’s performance is closely related to the prosperity of semiconductor power discrete device industry, so it will be affected by macroeconomic fluctuations. If the macroeconomic downturn or downstream demand is less than expected, the company’s revenue and profit growth may be adversely affected; (2) Risk of intensified market competition: IGBT is a power semiconductor device with high technical threshold, which has high requirements for R & D technology, product quality and service. Once the company’s technical level, the speed of product renewal and iteration, and the quality of products and services are reduced, it may be robbed of market share by competitors; (3) Risk of insufficient production capacity: at present, the company still focuses on fabless mode, and the iteration speed of product R & D and design is fast. However, if the production capacity of the company’s main suppliers is seriously strained or the relationship between the two sides deteriorates, the company’s supply and customer expansion may be affected, and the performance may be adversely affected.
