\u3000\u3 Guocheng Mining Co.Ltd(000688) 099 Amlogic (Shanghai) Co.Ltd(688099) )
The demand for media terminal chips is strong, and the performance increases quarter by quarter in 2021. In 2021, the annual revenue was 4.777 billion yuan (YoY 74.5%), the net profit attributable to the parent was 812 million yuan (YoY 606.7%), and the net profit not attributable to the parent was 716 million yuan (YoY 742.7%). In the fourth quarter, the single quarter revenue was 1.544 billion yuan (YoY 58.6%, QoQ 25.4%), the net profit attributable to the parent company was 310 million yuan (YoY 141.8%, QoQ 22.9%), and the net profit not attributable to the parent company was 285 million yuan (YoY 154.1%, QoQ 43.6%), both of which reached a quarterly record high. The main reason for the great increase in annual performance: the technical and product advantages formed by the company’s continuous R & D investment, successful strategic layout and high-quality customer structure are fully displayed under the strong demand of global multimedia terminal chips.
The sales of multimedia intelligent terminal chips increased significantly, and the shipment of WiFi Bluetooth chips increased significantly. In 2021, the company’s chip sales reached 159 million (58.6%), including 155 million multimedia intelligent terminal chips (YoY 54.2%), realizing an operating revenue of 4.739 billion yuan (YoY 73.44), and the gross profit margin increased by 8.57pct to 41.5% year-on-year, mainly due to the strong demand for Chinese and overseas set-top box markets and aiot chips, which promoted the sales of S-Series and AI series SOC chips, The company’s V-series SOC chips applied to the on-board infotainment system began to steadily increase the sales volume of overseas high-value customers; The sales volume of other chips was 4.518 million (1741008%), and the operating revenue was 376329 million yuan (YoY 686.8%), which was mainly due to the significant increase in the shipment of WiFi Bluetooth chips officially commercially produced by the company in 3q21.
The R & D cost exceeded 900 million yuan, and the R & D of each product line was promoted in coordination. The company’s annual R & D expenditure was 904 million yuan (YoY 56.5%), and the scale effect of revenue growth reduced the R & D expenditure rate by 2.18pct to 18.92%; The number of R & D personnel increased by 45% to 1131. The company’s s s series has achieved a breakthrough from 28nm to 12NM, leading the industry, and has been adopted by ZTE, Skyworth, Xiaomi, Alibaba, Google, Amazon, etc. the terminal products have been widely used in the equipment of Chinese and overseas operators; AI series SOC chips adopt the industry-leading 12NM process and are adopted by major customers at home and abroad such as Xiaomi, TCL, Alibaba, Google, Amazon and SONOS. The application field of AI series SOC chips is expected to be further expanded; After mass production of w155s1, the company continued to accelerate the research and development of the next generation Wi Fi Bluetooth chip; V series vehicle mounted chips further expand new technologies and obtain orders from overseas vehicle manufacturers; The 6nm test chip is progressing smoothly.
Investment suggestion: China’s leading SoC design company of multimedia intelligent terminal maintains the “buy” rating. It is estimated that the company’s revenue will increase by 41.9%, 29.3% and 25.2% year-on-year to 6.78, 8.77 and 10.98 billion yuan (the value was 6.45 and 7.93 billion yuan before 22-23 years), and the net profit attributable to the parent company will increase by 55.1%, 33.0% and 28.8% year-on-year to 12.6, 1.68 and 2.16 billion yuan (the value was 1.11 and 1.47 billion yuan before 22-23 years). The current stock price corresponds to 34.6, 26.0 and 20.2 times PE from 2022 to 2024, maintaining the “buy” rating.
Risk warning: the demand is less than expected; Chip manufacturing capacity is lower than expected; New products are not as expected, etc
