Key investment points:
Event: the Ministry of industry and information technology recently promoted the stable production and resumption of production of key industrial enterprises, and concentrated resources to give priority to ensuring the resumption of production of enterprises in key industries such as integrated circuits. Integrated circuit related wafer manufacturing, semiconductor materials, semiconductor equipment, packaging and testing and other links, the company is expected to be guaranteed to help some suspended enterprises return to work and production, and dredge the problems in the supply chain of integrated circuit companies.
The resumption of work and production is expected to dredge the logistics and promote the restart of automotive semiconductor demand. Most semiconductor enterprises in Shanghai have started closed-loop management since the beginning of the epidemic, and their production has not been greatly affected. More than 6000 people in five factories of Huahong group in Shanghai stick to their posts and ensure continuous chip production National Silicon Industry Group Co.Ltd(688126) previously, nearly 400 people were organized to enter the company to implement closed management to ensure the continuous production of the factory. Although the production of most semiconductor enterprises has not been greatly affected, the shutdown of logistics links and supply chain enterprises still poses challenges to normal operation. It is expected that with the Ministry of industry and information technology promoting the resumption of work and production of key enterprises, the logistics and upstream and downstream links of semiconductor enterprises in Shanghai will be further dredged, so as to promote the gradual normalization of enterprise production and operation. On the other hand, automobile manufacturing is also an important downstream application of semiconductors. With the resumption of work and production of the automotive industry chain, the demand for automotive semiconductors is expected to restart.
The valuation of the electronic sector has reached the bottom, and domestic substitution has opened up new growth space. Since this year, the electronic sector has made significant adjustments, but the current valuation has reached the bottom. At present, the valuation of the electronic sector has been lower than the lowest point in 2018. At present (data on April 17), the PE TTM valuation of CITIC electronics index is only 30 times, while the lowest PE TTM valuation of the electronics sector in 2018 is 29 times. However, the electronics company still achieved brilliant performance this year. For example, the net profit attributable to the parent company in Hangzhou Silan Microelectronics Co.Ltd(600460) 2022q1 is expected to increase by 50% to 70% year-on-year, the net profit attributable to the parent company in Gigadevice Semiconductor (Beijing) Inc(603986) 2022q1 is expected to increase by 126% year-on-year, and the net profit attributable to the parent company in Naura Technology Group Co.Ltd(002371) 2022q1 is expected to increase by 170% to 200% year-on-year. Although the market is worried about the weakening demand for consumer electronics and the downturn of the business cycle recently, we believe that the domestic substitution process of semiconductors as a whole has just begun. Due to the rapid growth of demand for photovoltaic and new energy vehicles, the products of overseas semiconductor manufacturers continue to be in short supply. Ruyi France semiconductor and other large manufacturers also announced further price increases at the end of March. Under the background of rapid growth in new fields and long delivery cycle of foreign capital, we believe that semiconductor related companies will benefit from domestic substitution, so as to continue to achieve rapid growth.
It is suggested to pay attention to: semiconductor equipment: Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , Kingsemi Co.Ltd(688037) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) etc; Power semiconductor: Hangzhou Silan Microelectronics Co.Ltd(600460) , Starpower Semiconductor Ltd(603290) , Zhuzhou Crrc Times Electric Co.Ltd(688187) , Wuxi Nce Power Co.Ltd(605111) , etc; Design Category: Will Semiconductor Co.Ltd.Shanghai(603501) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , Ninestar Corporation(002180) , Amlogic (Shanghai) Co.Ltd(688099) , Rockchip Electronics Co.Ltd(603893) , Allwinnertech Technology Co.Ltd(300458) , etc; Semiconductor materials: National Silicon Industry Group Co.Ltd(688126) , Hangzhou Lion Electronics Co.Ltd(605358) , Hubei Dinglong Co.Ltd(300054) , etc.
Risk warning: downstream demand is less than expected, R & D progress is less than expected, and supply chain recovery is less than expected.
