\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
On April 19, Wuxi Nce Power Co.Ltd(605111) released the first quarterly report. The company achieved a revenue of 421 million yuan in Q1, an increase of 30.39% year on year and 5.45% month on month; The net profit attributable to the parent company was 112 million yuan, a year-on-year increase of 50.11% and a month on month increase of 12.70%. Exceeding the upper limit of the previous notice (110 million yuan).
Q1 performance exceeded expectations, product upgrading & downstream optimization strengthened profitability: the company's operating performance continued to grow at a high rate, and Q1 achieved a revenue of 421 million yuan, a year-on-year increase of 30.39% and a month on month increase of 5.45%; The net profit attributable to the parent company was RMB 112million, a year-on-year increase of 50.11% and a month on month increase of 12.70%. Excluding 19.08 million yuan of equity incentive expenses, the net profit attributable to the parent company reached 131 million yuan, an increase of 74.77% year-on-year and 31.45% month on month, exceeding market expectations. In terms of profitability, the company's gross profit margin in the first quarter was 39.72%, unchanged month on month, and the net profit margin attributable to the parent company was 26.7%, increased by 1.7pct month on month. Under the condition of rising upstream supply chain costs, the company's gross profit margin still showed good performance, mainly due to the continuous optimization of product structure and downstream market.
The products continued to be high-end, and the proportion of high-voltage devices such as IGBT increased rapidly: the proportion of trench MOS revenue of the company further decreased from 55.79% in 20 years to 45.31% in 21 years, and Q1 in 22 years further decreased to about 30%. Shielded gate MOS has increased from 31.69% in 20 years to 38.96% in 21 years, and Q1 in 22 years has reached more than 40%. In addition, the proportion of Q1 superjunction and IGBT increased to 12% and 10% respectively. We expect that thanks to the shortage of high-voltage devices and the continuous upgrading of the company's products, the proportion of trench MOS will further decline in the whole year of 22 years. In addition, the company aims at the third generation semiconductor layout. SiC and Gan products have products and will send samples to customers for testing. It is expected to contribute revenue in 23 years.
Upgrade downstream to automobile and photovoltaic, cut into leading customers and enhance stickiness: the company's downstream revenue of pure consumer products is reduced to less than 20%, and is cutting into medium and high-end industries such as new energy vehicles, UAVs, industrial power supply and photovoltaic with better gross profit margin. Among them, Byd Company Limited(002594) , which has been imported into automobile, has realized the mass supply of dozens of products, and has entered the whole machine parts factories of multiple automobile brands; In terms of photovoltaic energy storage, the company's IGBT and MOS have achieved mass sales in Sungrow Power Supply Co.Ltd(300274) , Deye and other leading enterprises. We expect that the proportion of photovoltaic + automobile revenue in 22 years is expected to reach more than 30%. In addition, the company's customer structure has gradually switched from scattered small customers to industry leading customers, with stronger customer stickiness.
Investment suggestion: we expect that the net profit attributable to the parent company in 2022 / 23 / 24 will be 524 / 710 / 973 million yuan respectively, and the corresponding current price (closing price on 2022.4.19) PE will be 36 / 26 / 19 times respectively. As one of the leaders of power devices in China, the company has rich products and outstanding brand strength. At present, it is continuously optimizing the product structure, and new products such as IGBT and SiC are progressing smoothly. At present, the tolerance of photovoltaic, automobile and other market scenarios continues to rise, and Chinese end customers are increasing domestic substitution, so the company ushers in the opportunity of rapid growth. Maintain a "recommended" rating.
Risk tip: cyclical fluctuation risk of the industry; The risk that the technical iteration is not as expected; Risks of capacity climbing and customer development falling short of expectations
