\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )
Events
The company released the performance report for 2021. In 2021, the company achieved a revenue of 24.104 billion yuan, a year-on-year increase of 21.59%, a net profit attributable to the shareholders of the parent company of 4.476 billion yuan, a year-on-year increase of 65.41%, and a net profit attributable to the shareholders of the parent company of 4.003 billion yuan, a year-on-year increase of 78.30%.
CIS automobile / security accounts for more than 30%, and R & D strength is the core competitiveness
In 2021, due to the impact of the epidemic, China’s mobile phone market, especially the high-end market, was relatively depressed. According to our previous research on the industrial chain, from the fourth quarter of 2021 to the first quarter of this year, the intelligent terminal was basically in the stage of de stocking water level. Recently, the repeated epidemic in some areas once again had a certain impact on the supply chain. We believe that with the gradual control of the epidemic and the orderly recovery of the global supply chain and logistics system, China’s Android smartphone brand will bring a richer product portfolio, and the demand is expected to recover gradually. According to the company’s annual report data, in 2021, the company’s CIS business revenue accounted for 71%, and the revenue of touch and display solution business and simulation solution business accounted for 8% and 6%. In the downstream application field of CIS business, smart phones account for 57%. At present, they are the largest application field of CIS of the company. Security monitoring and automotive electronics account for 18% and 14% of CIS revenue respectively, accounting for more than 30% in total. Security CIS and automotive CIS achieved revenue of US $361 million and US $481 million respectively, an increase of more than 80% and 60% respectively compared with 2020. According to icinsights data, the global CIS market is expected to reach US $33.6 billion by 2025, including US $15.7 billion for mobile phone CIS market, US $5.1 billion for automobile CIS market and US $3.2 billion for security CIS market. In 2021, the company will make full use of the opportunity of increasing volume and price to realize the rapid increase of sales revenue and market share in the field of vehicle. In the future, the company will continue to cultivate mobile phone CIS, further reduce the gap with international mainstream manufacturers, and increase the full layout of CIS in the fields of automobile, security, medical treatment and so on, so as to improve the market share. In 2021, the R & D investment of the company’s semiconductor design business reached 2.62 billion yuan, with a year-on-year increase of 24.79%. The company continued to innovate the R & D mechanism, realize product upgrading and new product development, and further strengthen the company’s core competitiveness in the industrial chain.
Oledddic has been verified by China’s head screen factory and has been replaced in an all-round way
In 2021, the company introduced a new R & D team to supplement oledddic product line, improve product matrix and start all-round replacement. According to the company’s annual report, oledddic products have been verified in China’s head screen factory and will be applied to smartphone customer product solutions in 2022. Mobile phone mobile phone long time OLED has been a major driver of IC in China. The China Mobile’s IC driver has dominated the market share in the past long period. With the breakthrough of OLED in China, the domestic OLED driving IC is expected to be matched. In smartphone TDDI, the market share of the company is dominated by the companies in China and the future will focus more on OLED and vehicle related fields. We predict that driving IC is the most critical link in the panel industry chain. After this round of shortage and price increase, the stability of supply and product reliability are the first factors considered by intelligent terminal manufacturers, and China’s leading enterprises are expected to benefit fully. Relying on the innovation and iteration of tddi products, the company further expands end customers and achieves rapid growth.
Investment advice
Due to the repeated outbreaks in some regions recently, which have a certain impact on the supply chain, we adjusted our previous profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 30 billion yuan, 36 billion yuan and 43 billion yuan respectively (the previous forecast data in 2022 and 2023 were 35 billion yuan and 46 billion yuan respectively); The net profit attributable to the shareholders of the parent company was 5.669 billion yuan, 7.065 billion yuan and 8.55 billion yuan respectively (the previous forecast data in 2022 and 2023 were 6.530 billion yuan and 8.902 billion yuan respectively); The corresponding EPS is 6.47 yuan, 8.06 yuan and 9.75 yuan respectively (the previous EPS forecast data were 7.46 yuan and 10.17 yuan respectively), and the PE corresponding to the closing price of 182.71 yuan on April 18, 2022 is 28.26 times, 22.68 times and 18.74 times respectively. Based on the growth path of overseas semiconductor leading enterprises, we believe that kuanracetrack high-quality companies gradually meet the platform development opportunities, continue to grow bigger and stronger, firmly value the company’s long-term investment value and maintain the “buy” rating.
Risk tips
Repeated epidemics, lower than expected innovation of optical track, lower than expected shipment of intelligent terminal, lower than expected breakthrough of new products, lower than expected breakthrough of new semiconductor products, lower than expected customer expansion, price pressure caused by intensified industry competition, etc.
