\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 27 Sino Wealth Electronic Ltd(300327) )
Event: Sino Wealth Electronic Ltd(300327) april 20 released the first quarterly report of 2022. In 22q1, the company achieved a revenue of 464 million yuan (YoY + 51.44%, QoQ + 15.91%), a net profit attributable to the parent company of 128 million yuan (YoY + 89.97%, QoQ + 25.1%), and a net profit attributable to the parent company of 110 million yuan (YoY + 87.86%, QoQ + 6.85%) after deducting non recurring profits and losses, mainly including 20.677 million yuan of government subsidies received in Q1.
Customer orders are in full demand, and the impact of covid-19 epidemic is controllable. 22q1 company has full demand for customers’ orders and still achieved year-on-year growth in revenue and profits under the impact of covid-19 epidemic. In terms of gross profit margin, the company’s 22q1 gross profit margin was 46.9% (YoY + 2.37pct, qoq-2.63pct), with a slight decline in the ring ratio, mainly due to the rising price of the OEM and the high cost of some new capacity in 22 years. The main agent factories of 22q1 company, Suzhou Hejian and Shanghai headquarters, were affected by the epidemic: 1) in February, the company’s suppliers and ship chips were shut down for 11 days due to the epidemic, which had a slight impact on the wafer output of Q1 and Q2, and the impact on the company’s annual sales revenue is expected to be less than 3%; 2) Due to concerns about the possible impact of the epidemic in Shanghai, some customers picked up their orders in the first week of April at the end of March in advance. The sales realized in advance accounted for less than 5% of Q1 sales. In addition to the above factors, the epidemic has a limited impact on the company’s production and sales.
MCU: domestic substitution demand continues to be strong, and the matrix of high-end products continues to be improved. 1) White power MCU: in the past 22 years, the domestic substitution demand for white power MCU has continued to be strong, and the company has made a breakthrough in mass production in the field of variable frequency power supply. In the past 22 years, with the release of new production capacity, it is expected that the market share of white power MCU of the company will further increase. 2) MCU of small household appliances: China’s leading manufacturer has gradually withdrawn from the market of low price and low gross profit under the condition of limited production capacity, served leading customers and focused on product upgrading. At present, the company has mass produced 32-bit MCU in large clients of small household appliances. 3) Automotive MCU: the company’s first vehicle specification MCU is expected to be launched in mid-2022, which is mainly used in general fields such as body control. If it goes well, it is expected to be introduced into customer mass production in 2023.
Lithium battery management chip: head mobile phone brand customers continue to make breakthroughs and market share continues to increase. 1) Smart application market: in the past 22 years, with the continuous introduction and volume of new customers of smart phone brand, the share will achieve further breakthroughs; In addition, the laptop market is also expected to achieve customer breakthrough; 2) Power application market: benefiting from the development of electric bicycles, electric tools and China Shanxi Guoxin Energy Corporation Limited(600617) energy storage market, the company’s lithium battery management chip business of power application is expected to maintain steady growth. In addition, with the increasing requirements of lithium battery management chip for measurement technology, the company’s design platform is gradually transitioning from 8-bit to 32-bit, and the manufacturing process is refined from 8-inch to 12-inch 90nm / 55nm.
Display driver chip: benefiting from the increased penetration of AMOLED, the brand market has broad replacement space. The penetration rate of AMOLED display screen continues to improve, and has gradually become the mainstream of mobile phones. In the past 21 years, the company’s products have rapidly expanded in the smart phone aftermarket, and entered the wearable brand market at the same time. In the future, as the company’s AMOLED display driver chip enters the mobile phone brand market, the market space will be further opened.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 2022, 23 and 24 will be RMB 515, 66 and 779 million respectively, and the corresponding current price PE will be 35, 28 and 23 times respectively. The company is a leading industrial control MCU manufacturer in China. The growth momentum of home appliance MCU, BMIc, display driver chip and other product lines is clear, and the “recommended” rating will be maintained.
Risk warning: the risk of downstream market fluctuation; The risk of intensified market competition; R & D progress is less than expected.
