\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
Event: on April 15, the company released the performance forecast for the first quarter of 2022, realizing a net profit attributable to the parent company of about 681 million yuan, with a year-on-year increase of about 126%; The net profit deducted from non parent company was about 650 million yuan, with a year-on-year increase of about 135%.
Product energy level improvement + diversified supply chain layout, and the performance of the first quarter achieved a “good start”. According to the performance forecast, the net profit attributable to the parent company in the first quarter of 2022 is about 681 million yuan, which is expected to increase by 380 million yuan, with a year-on-year increase of about 126.12%; The net profit deducted from non parent company is about 650 million yuan, which is expected to increase by about 373 million yuan, with a year-on-year increase of about 134.84%. The pre increase of the company’s performance in the first quarter was mainly due to the continuous optimization of product structure and customer structure, the diversified layout of supply chain, overcoming the impact of the epidemic, and the rapid growth of Q1’s main business. As a leading enterprise of “MCU + storage” chips in China, relying on the product and technical advantages accumulated in the field of MCU and storage, the company took many measures to strengthen capacity guarantee, and realized a net profit attributable to the parent company of 2.34 billion yuan in 2021, with a year-on-year increase of 165%. The performance of the first quarter has achieved a “good start”, and the high outlook since 21 years has continued.
MCU continues to develop in the automotive and industrial markets, and DRAM is expected to become a new growth pole. According to the latest report of forecasting agency autoforecast solutions, since the beginning of 2022, due to the shortage of chips, the estimated global automobile sales have been reduced by about 1.4 million. According to Morgan Stanley research, in 2020, the global 32-bit / 8-bit / 16 bit MCU market scale was US $10.4/4/3 billion respectively. The 32-bit MCU market scale grew rapidly, with CAGR of about 11% in recent five years. Medium and low-end consumer MCU faces certain price reduction pressure, but medium and high-end consumer, industrial control and vehicle regulation MCU still maintain a high prosperity. The company’s mcugd32 includes 3 product lines and 28 product series, which are entry-level, mainstream and high-performance. It occupies the 32-bit MCU’s best growth track and achieves rapid growth in the fields of industry, medical equipment, security monitoring, automotive instrumentation, entertainment audio-visual, T-box and home appliances. The market development in the field of vehicle mounted and industrial control injects sustainable power into the growth of MCU business. According to the company’s announcement, the first private brand 19nm / 4gbdram has been mass produced in June 2021, mainly for the niche market, and plans a variety of products with DDR3, DDR4, lpddr4, 19nm / 17nm process and 1GB ~ 8GB capacity. 17nmddr3 products are under active research and development. We believe that DRAM business is expected to become a new growth pole, benefiting from the increasingly improved product performance, increasingly rich product system and customer ecological effect. Judging from the development momentum of Q1, the annual performance in 2022 is expected to maintain a high-speed growth trend.
Investment suggestion: we estimate that the company’s revenue from 2021 to 2023 will be 8.51 billion yuan, 11.489 billion yuan and 15.28 billion yuan respectively, and the net profit attributable to the parent company will be 2.336 billion yuan, 3.169 billion yuan and 4.047 billion yuan respectively, maintaining the “Buy-A” investment rating.
Risk warning: the R & D Progress of new products does not meet expectations; The process switching progress is not as expected; Wafer capacity expansion did not meet expectations; MCU boom is lower than expected.
