\u3000\u3 Bohai Water Industry Co.Ltd(000605) 358 Hangzhou Lion Electronics Co.Ltd(605358) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the operating revenue was 2.541 billion yuan, a year-on-year increase of + 69.17%, and the net profit attributable to the parent company was 600 million yuan, a year-on-year increase of + 197.24%; In 2022q1, the operating revenue was 756 million yuan, a year-on-year increase of + 63.86%, a month on month increase of – 3.98%, and the net profit attributable to the parent company was 238 million yuan, a year-on-year increase of + 214.02%, a month on month increase of + 21.39%, close to the upper limit of performance forecast.
The performance continued to grow and the profitability continued to improve in the first quarter. Q1’s performance rose sharply in 2021 and 2022, and its profitability continued to improve in the first quarter, with a gross profit margin of 50.26%, a year-on-year increase of + 9.29pcts and a month on month increase of + 3.51pcts. Benefiting from the continuous increase in downstream demand driven by the rapid development of clean energy and new energy vehicles, D, the company earlier laid out the construction of new 6-inch, 8-inch and 12 inch silicon wafer production lines, implemented the capacity and technical transformation and improvement of power device chip manufacturing production lines, more fully met the growing market demand, timely adjusted the product structure and increased the sales price, so as to drive the continuous improvement of profitability.
The silicon wafer boom continues, and the volume is obvious in scale. According to semi data, 25 8-inch wafers and 60 12 inch wafers will be put into operation from 2022 to 2024. The expansion of wafer production capacity will drive the semiconductor silicon wafer market to maintain a high prosperity. In 2022, the company plans to realize the production of new expanded production lines of 6-inch silicon wafer, 8-inch silicon wafer and 12 inch silicon wafer in Quzhou base, accelerate the completion of phase II project of 6-inch silicon wafer and 12 inch silicon wafer production line, complete the M & A of Guojing semiconductor, and comprehensively accelerate the localization and industrialization of 12 inch silicon wafer. We believe that the scale and structure of the company’s silicon wafer products will be significantly improved.
The chip track has good growth and opens up the space for performance growth. The company’s chip track mainly includes power device business and compound semiconductor RF chip business. Power devices account for 46% of the total shipments in the field of photovoltaic products in 2021 and 43-47% of the global sales of photovoltaic chips. In 2022, the company will further consolidate its leading position in the global photovoltaic chip market and strengthen the expansion of vehicle chip business; The compound semiconductor RF chip business has developed a batch of products with the characteristics of low cost, high flexibility, high uniformity and high reliability, such as 0.15|ime modephemt, and has successively entered the market. It is planned to start the phase I construction project of Haining compound integrated circuit chip project in 2022, which is expected to maintain the momentum of rapid volume increase.
Investment suggestion: give “overweight” rating for the first time. It is estimated that the company’s EPS in 2022, 2023 and 2024 will be 2.13, 2.77 and 3.41 yuan respectively, corresponding to 39, 30 and 25 times of PE. The company has the whole chain technology from materials to chips, which fully benefits from the growth of downstream clean energy and new energy vehicles. Under the background of localization, the company has both competitiveness and growth power, and is rated as “overweight” for the first time.
Risk tips: upstream raw material price rise risk, downstream demand is less than expected, and customer development is less than expected.
