\u3000\u3 Guocheng Mining Co.Ltd(000688) 798 Shanghai Awinic Technology Co.Ltd(688798) )
Event:
The company released its annual report for 2021, and achieved an operating revenue of 2.327 billion yuan, a year-on-year increase of 61.86%; The net profit attributable to the parent company was 288 million yuan, a year-on-year increase of 183.56%; The net profit attributable to the parent company after non deduction was 247 million yuan, a year-on-year increase of 175.04%.
Comments:
Strong downstream demand creates opportunities and steadily improves profitability
The annual performance in 2021 basically met expectations, the prosperity of the semiconductor industry continued to improve, the strong demand for downstream applications brought opportunities, and the company’s revenue and profit increased significantly. Q4 achieved a revenue of 666 million yuan in a single quarter, an increase of 42.19% year-on-year and 11.92% month on month; The net profit attributable to the parent company was 93 million yuan, with a year-on-year increase of 325.20% and a month on month increase of 26.12%. The improvement of profitability benefits from the company’s increasing R & D investment, expanding product matrix, continuously expanding market and increasing market share of existing customers. In 2021, the company invested 417 million yuan in R & D expenses, accounting for 17.91% of revenue, with a year-on-year increase of 102.91%. The company added more than 200 new product models throughout the year, and downstream applications gradually penetrated from consumer electronics into aiot, industry, automobile and other fields. In 2021, the company continued to optimize the cost structure and improve the comprehensive gross profit margin
The four major product lines continue to expand, broaden the process platform and ensure the supply of production capacity
In 2021, the company achieved sales growth of audio power amplifier chips, power management chips, video front-end chips and motor drive chips, with annual sales reaching 4.3 billion. The total product models of the company have reached more than 800, and the product sub categories have reached 41 categories. In 2021, the company took the lead in cooperating with TSMC and Huahong to cut into the 12 inch 90nmbcd wafer process, and actively arranged the advanced packaging process, which not only guaranteed the production capacity, but also reduced the manufacturing cost, widened the process platform, and laid a solid foundation for the long-term growth of the company.
Profit forecast and investment suggestions
The iteration of the company’s products is accelerated. We expect that the revenue from 2022 to 2024 will be RMB 3.639/53.77/7.418 billion respectively, the net profit attributable to the parent company will be RMB 448/6.20/784 million respectively, the EPS will be RMB 2.70/3.74/4.72/share respectively, and the corresponding PE will be 52 / 38 / 30 times respectively. We are optimistic that the company will accelerate the expansion of product lines around digital analog mixed signal, analog and RF technologies. With reference to the valuation of comparable companies, we will give about 70 times PE and a “buy” rating corresponding to the 2022 profit forecast, with a target price of 189 yuan.
Risk tips
The risk of intensified market competition and technology iteration.
