\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
Events
On April 14, the company disclosed that the net profit attributable to the parent company in 2022q1 was 680 million yuan, a year-on-year increase of 126%, and the net profit deducted from non attributable to the parent company was 650 million yuan, a year-on-year increase of 135%, and the performance exceeded expectations.
Commentary
22q1 exceeded expectations, thanks to the improvement of product structure. In 2022q1, the net profit attributable to the parent company was 680 million yuan, an increase of 126% year-on-year and a slight decrease of 1PCT month on month; Net profit deducted from non parent company was 650 million yuan, with a year-on-year increase of 135%. The high performance growth mainly benefited from the company's continuous optimization of product structure, customer structure and diversified supply chain layout, realizing the high growth of its main business under the plight of the epidemic.
We continue to be optimistic about the long-term growth of the company. From the perspective of business:
In norflash, the price of high-capacity norflash in the automotive, industrial and household power demand driven industry market is stable. At present, Zhaoyi's norflash is gradually abandoning 32MB and other low-capacity products and focusing on 128MB ~ 2GB and other medium and high-capacity products. Among them, norflash for Industry and automobile is growing rapidly, and the conversion from 65nm to 55nm is smooth, resulting in an increase in production capacity and gross profit margin. We expect norflash to continue to grow steadily in 22 years.
2) in terms of DRAM, it is expected that 17nm DDR3 will be launched and supplied in batches in the first half of this year, focusing on security, set-top box and industry. Compared with 20nm products from Taiwan, it has strong cost performance advantages. With reference to the OEM cost disclosed by the company of 860 million yuan, it is expected that the self-developed DRAM products will bring more than 1.6 billion yuan of revenue contribution in 22 years.
3) in the field of MCU, industry + automobile accounts for more than 40%, and mass production of vehicle specification products is expected in the second half of the year. At present, the average delivery cycle of MCU is still maintained at more than 30 weeks, of which some automotive and industrial MCU are extended to 50 weeks, superimposed with the overall price increase of St. we expect that the global shortage of high-end MCU such as automotive, industrial and military industry will be difficult to alleviate in 22 years; At the same time, under the influence of the Russian Ukrainian war, we expect that the downstream terminal manufacturers are expected to increase the stock again in order to ensure the safety of the supply chain, which will continue to push up the price of MCU. Under the condition of limited production capacity, overseas manufacturers are expected to give priority to overseas customers, which will accelerate the domestic substitution process. With the mass production and shipment of vehicle regulation MCU from June to July this year, the share of Zhaoyi downstream automobile + industry will be higher, which is expected to maintain the continuous growth of MCU profit contribution in the whole year.
Investment advice
It is estimated that the net profit attributable to the parent company in 22-23 years will be 3.199 and 4.165 billion yuan, with a year-on-year increase of 36.87% and 30.18%, corresponding to EPS of 4.79 and 6.24, and continue to maintain the "buy" rating.
Risk tips
The launch of new products is less than expected; The risk of lifting the ban on restricted shares; The risk of Hefei Changxin being sanctioned by the United States.
