\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )
Matters:
The company issued the annual report of 2021. In 2021, the company achieved an operating revenue of 24.104 billion yuan, a year-on-year increase of 21.59%; The net profit attributable to the parent company was 4.476 billion yuan, a year-on-year increase of 65.41%. It is proposed to distribute a cash dividend of 5.20 yuan (including tax) for every 10 shares and increase 3.5 shares.
Ping An View:
The company's semiconductor design business grew rapidly, supported by vehicle mounted and security CIS. Semiconductor design and sales business is the company's main source of revenue. In 2021, this part of business achieved a revenue of 20.38 billion yuan, a year-on-year increase of 18.02%, accounting for 84.55% of the company's revenue. The growth of operating revenue of semiconductor design business is mainly due to the obvious increase of CIS revenue in automobile, security and other fields. In the field of vehicle mounted, as the penetration rate of image sensors, loading rate and other indicators are improving, the company has seized the opportunity of simultaneous increase in market volume and price, and the sales scale has been significantly expanded. In the field of security, smart city and smart home also put forward higher quality and quantity requirements for image sensors. The company has grown rapidly in medium and high-end security products. In 2021, the company's security and vehicle CIS revenue accounted for 18% and 14% of the company's image sensor business respectively, ranking second and third after mobile phones. The company's touch and display solutions have also made great breakthroughs. Tddi (touch driver chip) product td4375 has been mass produced in many projects of first-line mobile phone brand customers. Oledddic (display driver chip) products have been verified in China's head screen factory and will be applied to the product solutions of smart phone customers in 2022.
The gross profit margin continued to rise and the expenses during the period were well controlled. In 2021, the company's gross profit margin reached 34.49%, a significant increase of 4.58 percentage points over the previous year. Among them, the gross profit margin of semiconductor design and sales business reached 37.90%, 6.15 percentage points higher than the same period last year. Among the main products, the gross profit margin of CIS products reached 33.64%, an increase of 2.27 percentage points over the same period of last year; Due to the tight supply and demand of tddi, the gross profit margin reached 60.90%, a significant increase of 36.87 percentage points over the previous year; The gross profit margin of power IC in analog chip sector also exceeded 50% in 2021, an increase of 17.20 percentage points over the same period of last year; The gross profit margin of RF and micro sensors also improved significantly, reaching 17.26% in 2021, a significant increase of 13.26 percentage points over the same period last year. During this period, the cost rate was well controlled. In 2021, the cost rate was 15.21%, a decrease of 0.68 percentage points over the previous year. Among them, the management expense rate decreased the most, with the expense rate of only 2.84% in 2021, a decrease of 1.07 percentage points over the previous year.
Automobile, security and other fields will become the new growth point of CIS of the company. The company's main business CIS, whether now or in the next few years, mainly depends on the mobile phone market. According to the latest report of counterpoint, the global CIS market will reach US $21.9 billion in 2022, with a year-on-year increase of 7%, of which the mobile CIS market will contribute 71.4% of the revenue. In the mobile phone CIS market, with the sinking of high-order pixel products such as 64 million pixels and the wide application of new products such as 50 million pixels, the mobile phone CIS market still has growth potential. As the second largest application market of CIS in the world and the fastest growing application market, counterpoint expects to account for 8.6% of the global CIS market in 2022. In recent years, on the basis of the original cooperation between European and American mainstream automobile brands, the company is also introducing into the scheme of Chinese traditional automobile brands and new forces in automobile manufacturing, which will also bring new revenue and profit growth points to the company. In the security market, the company's image sensor can capture images with higher resolution and longer distance under the same amount of light. In addition, it can also reduce the number of LEDs, so as to reduce the overall power consumption. In 2021, the company achieved revenue of $481 million in the field of security, an increase of more than 60% over 2020. In the future, it will continue to make efforts in the medium and high-end market, and its market share is expected to increase.
Investment suggestion: the company has strong market competitiveness in the CIS field, and will benefit from the rapid growth of automobile, security and other scenes in the future. In addition, the company is also making efforts in touch and display drivers, analog circuits and other fields. The layout of semiconductor design business is becoming more and more complete, and the platform trend is obvious. Combined with the latest annual report and the development of the industry, we adjusted the company's profit forecast. It is estimated that the net profit from 2022 to 2024 will be 5.851 billion yuan (the previous value is 5.982 billion yuan), 7.22 billion yuan (7.549 billion yuan) and 8.817 billion yuan (New), and the EPS will be 6.67 yuan, 8.23 yuan and 10.05 yuan respectively, corresponding to 27.4 times, 22.2 times and 18.2 times of PE on April 18, respectively. We are optimistic about the follow-up development of the company and maintain the "recommended" rating.
Risk tips: 1) downstream demand growth is less than expected; 2) The progress of technology research and development may be less than expected; 3) Risk of insufficient capacity.
