\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
Matters:
The company released the first quarterly report of 2022, realizing an operating revenue of 421 million yuan, a year-on-year increase of 30.79%, and a net profit attributable to shareholders of listed companies of 112 million yuan, a year-on-year increase of 50.11%.
Ping An View:
The prosperity of the industry continued to be high, and the company’s 22q1 performance increased rapidly: in the first quarter of 2022, the company realized an operating revenue of 421 million yuan (+ 30.79% YoY, + 5.51% QoQ), and the net profit attributable to shareholders of listed companies (after deducting the relevant share payment sharing expenses formed by equity incentive) was 112 million yuan (+ 50.11% YoY, + 12% QoQ). The gross profit margin and net profit margin of 2022q1 company are 39.72% (+ 6.23pctyoy) and 26.72% (+ 2.98pctyoy) respectively, and the weighted average return on net assets is 7.04% (+ 0.79pctyoy). Benefiting from the rise of emerging application fields such as automotive electronics (including fuel vehicles and new energy vehicles), photovoltaic inverter and photovoltaic energy storage, as well as the acceleration of the localization process of core components and devices, the prosperity of the power semiconductor industry continues to be high. Focusing on the market demand, customer demand and industry development trend, the company actively carried out R & D upgrading and product technology iteration, optimized the market structure, customer structure and product structure, opened up emerging markets and developed key customers, and achieved better growth in business scale and benefits.
The product structure has been continuously adjusted, and the development of emerging markets and key customers has achieved remarkable results: under the condition of weak demand and falling price of some medium and low-end MOSFET products in the consumer electronics field, the company has actively adjusted its product structure and allocated more resources to sgt-mosfet and IGBT, so as to maintain the gross profit margin at a high level. In terms of proportion, the company’s sgtmosfet platform is the product process platform that replaces the most product item numbers of world-class manufacturers among medium and low voltage products, and its proportion has increased to 38.96% in 2021; IGBT products have achieved sales of 805144 million yuan in 2021, and will continue to be sold in large quantities this year. The company will also continue to actively adjust the product structure within each platform according to the actual situation of the downstream market, so as to better meet the needs of customers and obtain better profitability. At the same time, the company has successfully introduced products into emerging application fields and continued to develop more industry leading customers, further expanding the market scale and influence, such as actively expanding medium and high-end fields such as automotive electronics, photovoltaic inverter and photovoltaic energy storage, charging pile, high-end industrial control, high-end electric tools, 5g base station power supply, lithium battery protection, plant protection UAV, Siasun Robot&Automation Co.Ltd(300024) and other fields.
Focus on automotive electronics and photovoltaic new energy, which is expected to become a new performance growth point in the future: in the automotive field, the company has focused on introducing Byd Company Limited(002594) , and has realized the mass supply of more than a dozen products. At the same time, the products have also entered the whole machine parts factories of several automobile brands; In the field of new energy, the company focuses on the photovoltaic inverter and photovoltaic energy storage market. 12 inch 1200V high-frequency low saturation voltage drop IGBT products have been stably mass produced, and IGBT and MOSFET products have been sold in large quantities in Ningbo Deye Technology Co.Ltd(605117) and other leading enterprises in China’s major photovoltaic inverter industry. In addition, with the development of new energy vehicles and photovoltaic new energy, higher requirements are put forward for electric energy conversion efficiency, stability, high-voltage and high-power demand and complexity. The assembly modularization and integration of semiconductor discrete devices have gradually become the mainstream trend of industrial technology development. Therefore, the market demand for power integration modules such as MOSFET and IGBT has gradually increased. Since the existing products are mainly MOSFET and IGBT single tube, the company will raise funds to further optimize the product structure and add products such as PIM, which is expected to help the automotive electronics, photovoltaic inverter and photovoltaic energy storage field become an important performance growth point of the company in the future.
Investment suggestion: the company has long been committed to the R & D and design of MOSFET, IGBT and other power devices, and extends the industrial chain to the packaging and testing link. The products are widely used in consumer electronics, automotive electronics, industrial electronics, new energy vehicles / charging piles, Internet of things, 5g, photovoltaic new energy and other fields. According to IHS statistics, in terms of sales scale, the company is the fourth silicon-based MOSFET supplier in China. In terms of high-end power devices, the company has a perfect layout, increasingly rich product series and models, and continues to explore emerging markets and key customers such as automotive electronics and photovoltaic new energy. It will fully benefit from the dual opportunities of high industry prosperity and domestic substitution, and its business will grow better. We maintain the company’s profit expectation. It is estimated that the company’s net profit from 2022 to 2024 will be 508 million yuan, 632 million yuan and 758 million yuan respectively, and EPS will be 355 yuan, 442 yuan and 531 yuan respectively, corresponding to PE of 36.8x, 29.5x and 24.6x respectively on April 19, maintaining the company’s “recommended” rating.
Risk tips: (1) downside risk of industry prosperity: the company’s performance is closely related to the prosperity of semiconductor power discrete device industry, so it will be affected by macroeconomic fluctuations. If the macroeconomic downturn or downstream demand is less than expected, the company’s revenue and profit growth may be adversely affected; (2) Risk of intensified market competition: MOSFET and IGBT are power semiconductor devices with high technical threshold. Once the company’s technical level, the speed of product renewal and iteration, and the quality of products and services are reduced, they may be robbed of market share by competitors; (3) Risk of insufficient production capacity: at present, the company still focuses on fabless mode, and the iteration speed of product R & D and design is fast. However, if the production capacity of the company’s main suppliers is seriously strained or the relationship between the two sides deteriorates, the company’s supply and customer expansion may be affected, and the performance may be adversely affected.
