\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )
Events
Will Semiconductor Co.Ltd.Shanghai(603501) released the annual report of 2021: the operating revenue was 24.104 billion yuan, with a year-on-year increase of about 21.59%, the net profit attributable to the parent was 4.476 billion yuan, with a year-on-year increase of 65.41%, and the net profit attributable to the parent after deduction was 4.003 billion yuan, with a year-on-year increase of 78.30%.
R & D investment was further strengthened, and the gross profit margin improved year on year
In 2021, the company’s semiconductor design business realized a revenue of 20.38 billion yuan (year-on-year + 18.02%), of which CIS realized a revenue of 16.264 billion yuan (year-on-year + 10.66%), tddi realized a revenue of 1.963 billion yuan (year-on-year + 163.9%), and in addition, the semiconductor distribution business realized a revenue of 3.66 billion yuan (year-on-year + 47.28%); In terms of gross profit margin, the overall gross profit margin of the company in 2021 was 34.42% (year-on-year + 4.68pct), of which the gross profit margin of semiconductor design business was 37.9% (year-on-year + 6.15pct), including CIS (gross profit margin 33.64, year-on-year + 2.27pct), tddi (gross profit margin 60.9%, year-on-year + 36.87pct); In terms of period expenses, the expense rate (excluding R & D) in 2021 was 6.46% (year-on-year -0.72pct), including sales expense rate of 2.14% (year-on-year + 0.27pct), management expense rate of 2.85% (year-on-year -1.07pct) and financial expense rate of 1.48% (year-on-year + 0.09pct). In addition, in 2021, the R & D investment of the company’s semiconductor design business reached 2.62 billion yuan (year-on-year + 24.79%), accounting for 12.86% of the revenue of semiconductor design business.
The demand for smart phones is under pressure, and the penetration of vehicle / security CIS has increased rapidly
In 2021, the company’s image sensor business accounted for 71%, of which mobile phone cis / security cis / automobile CIS accounted for 57% / 18% / 14% respectively. The slowdown in domestic demand caused by the epidemic and the relatively low performance of the high-end machine market led to a slight decline in the overall market performance of smart phones in the Chinese market. However, the company achieved revenue of 481 million US dollars in security CIS and 361 million US dollars in automobile CIS, with a year-on-year increase of more than 60% and more than 80% respectively
Rapid increase of penetration in non mobile CIS field.
According to IC insights data, it is estimated that the global CIS market will reach US $33.6 billion in 2025, and the sales of mobile phone CIS will increase at a compound annual growth rate of 6.3% in the next five years, reaching US $15.7 billion by 2025. Automobile will become the fastest growing application field of CIS in the next five years. By 2025, the market scale of vehicle CIS will reach US $5.1 billion, with a compound annual growth rate of 33.8%, and the market scale of security CIS will reach US $3.2 billion in 2025, The compound growth rate in the next five years will be as high as 23.2%. In addition, the growth forecast of other areas of CIS in the next five years includes: medical and scientific systems (compound annual growth rate of 26.4%, reaching US $1.8 billion in 2025); Industry Siasun Robot&Automation Co.Ltd(300024) and Internet of things (CAGR of 21.8%, reaching US $3.5 billion in 2025).
Tddi / DDIC is progressing smoothly, and the touch display product matrix is perfect
The company’s tddi products have been mass produced in many projects of first-line mobile phone brand customers. At the same time, the company has introduced a new R & D team to supplement the OLED DDIC product line and further improve the company’s touch and display product matrix. At present, the company’s OLED DDIC has been verified in China’s head screen factory and will be applied to the product scheme of smart phone customers in 2022.
According to cinno’s prediction, the scale of China’s display driver chip market will increase significantly year-on-year by 68% to US $5.7 billion in 2021, and will continue to increase to US $8 billion by 2025, with CAGR reaching 9%. In terms of touch and display chips, according to Frost & Sullivan data, it is estimated that the global shipment of tddi chips will reach 1.15 billion in 2024, and the average annual compound growth rate from 2020 to 2024 will reach 18.3%. In terms of display driver chips, AMOLED is still in a period of rapid growth. At the same time, as the market of AMOLED screen is mainly occupied by Korean screen manufacturers, Korean OLED DIC company has a share of more than 80% in the global smartphone market. In the future, as China’s panel plants are put into operation one after another, China’s demand for OLED display drive is also increasing, and there is a large growth space for domestic substitution.
We believe that the company has a solid leading position in the CIS field and is expected to benefit from the rapid expansion of the on-board CIS market under the intelligent vehicle, so as to further improve its market position. At the same time, the layout of the company in touch display, simulation, RF and other directions is gradually realized, and it is expected to become the second growth pole of the company’s long-term development in the future.
Profit forecast
It is predicted that the company’s revenue from 2022 to 2024 will be 31.195 billion yuan, 40.927 billion yuan and 49.333 billion yuan respectively, and the EPS will be 6.26, 8.17 and 10.63 yuan respectively. The corresponding PE of the current stock price will be 26, 20 and 16 times respectively, maintaining the “recommended” investment rating.
Risk tips
The downside risk of industry prosperity, the risk that the progress of new products is less than expected, the risk of intensified industry competition, the risk of overseas policy changes, etc.
