\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 73 Yangzhou Yangjie Electronic Technology Co.Ltd(300373) )
Event overview:
The company released its 2021 annual report: the revenue was 4.4 billion yuan, yoy + 68%, the net profit attributable to the parent was 768 million yuan, yoy + 103%, and the net profit not attributable to the parent was 708 million yuan, yoy + 92% – the profit indicators exceeded the previous performance forecast. 21q4 company achieved revenue of 1.16 billion yuan, yoy + 49%, qoq-0.5%, net profit attributable to parent company of 200 million yuan, yoy + 76%, qoq-7.7%, deducting net profit attributable to non parent company of 170 million yuan, yoy + 52%, qoq-17%.
21q4 performance shows good growth
The company has accrued 17.95 million yuan of equity incentive expenses in Q4. If this factor is excluded, the net profit attributable to the parent company in Q4 is 221 million yuan, which is slightly higher than that in 21q3. In addition, considering that Q4 company usually generates large-scale management expenses, the company’s 21q4 operating performance exceeds market expectations and shows good growth.
Seize the opportunity of localization, grow rapidly, and blossom new products and subsidiary businesses at multiple points
The rapid growth of the company’s revenue and net profit in 2021 is mainly due to: 1) favorable policies in the field of photovoltaic / energy storage new energy. The company firmly grasped the domestic substitution opportunity and realized the rapid and large-scale production capacity and business. 2) Early research and development has entered the harvest period. The revenue of MOSFET invested in the early stage increased by 130% year-on-year, small signal products increased by 82%, IGBT products increased by 500% and module products increased by 35%. 3) The subsidiaries Yixing Jiexin (IGBT / MOSFET / rectifier bridge), Chengdu Qingyang (monocrystalline silicon chip) and Sichuan Yaji core (epitaxial chip / material) benefited from the market demand. In 2021, the revenue increased by 230%, 65% and 330% respectively year-on-year, and Jiexin and Yaji core reversed their losses and made greater contributions to the improvement of the company’s profits.
Practice internal skills diligently to achieve management and customer upgrading
1) deepen operation management and promote fine operation: introduce MTO combined with MPS planning mode to establish standard general product inventory to quickly respond to customer needs. At the same time, production management, equipment, engineering, procurement and other departments are linked to reduce costs in many aspects. In product management, the introduction of IPD management system ensures the launch progress of new products. 2) R & D is customer-oriented: in 21 years, we have completed the serial development of 8-inch trench1200vigbt chip, shipped IGBT Series module products in batches, launched 1200v40a, 650v50a 75A series single tube products for clean energy and realized batch delivery, and MOS products have developed customized products in the fields of PD power supply and security. 3) Marketing both inside and outside Shanghai to improve the global customer network: the overseas market continues to increase the global agent coverage network through the development of MCC brand. China expands its sales network and establishes a professional industry manager mechanism to achieve full coverage of top 10 customers in the fields of automotive electronics, industrial control, Netcom and clean energy.
The advantages of IDM mode are highlighted under the shortage of production capacity
From trade to packaging to manufacturing, the company now has 4-inch and 6-inch production lines, and actively arranges 8-inch production lines. The moat continues to improve and deepen the IDM advantage in the power field. The company’s automotive electronics & high-power wafer project 22q2 is expected to be put into use in 2022, providing strong support for the development of the company’s new energy vehicle business. In addition, the company’s “ultra thin and micro power semiconductor chip packaging and testing project” and MOSFET / IGBT packaging and testing capacity project will continue to expand production in 22 years to further enhance the capacity supporting capacity.
Investment advice
We predict that the net profit attributable to the parent company in 2022 / 23 / 24 will be RMB 1.01/12.3/1.61 billion, corresponding to 33 / 27 / 21 times of PE. Referring to the current 81 times PE (TTM) of Shenwan semiconductor, considering that the company, as one of the leading photovoltaic IGBT enterprises in China, has accelerated domestic substitution and maintained the “buy” rating.
Risk tips
The industry boom is less than expected, the progress of R & D is less than expected, and the ramp up of production capacity is less than expected.
