\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 61 Sg Micro Corp(300661) )
Events
Sg Micro Corp(300661) released the annual report of 2021 and the first quarterly report of 2022: in 2021, the operating revenue was 2.238 billion yuan, a year-on-year increase of 87.07%, the net profit attributable to the parent was 699 million yuan, a year-on-year increase of 142.21%, and the net profit attributable to the parent after deduction was 648 million yuan, a year-on-year increase of 145.48%; In 2022, Q1 achieved an operating revenue of 775 million yuan, a year-on-year increase of 96.81%, a net profit attributable to the parent company of 260 million yuan, a year-on-year increase of 244.98%, and a net profit attributable to the parent company of 247 million yuan, a year-on-year increase of 241.78%.
Key investment points
The gross profit margin in 2022q1 reached a record high
The performance of Q4 in 2021 was the best in the whole year, and Q1 increased again in 2022 (revenue + 10% and net profit attributable to parent company + 4.8%). In terms of subdivided products, the company’s signal chain and power management achieved revenue of 709 million yuan (year-on-year + 103.38%) and 1.53 billion yuan (year-on-year + 80.27%) respectively in 2021; In terms of gross profit margin, the overall gross profit margin of the company in 2021 was 55.5% (year-on-year + 6.77pct), of which the gross profit margins of signal chain and power management were 60.77% (year-on-year + 2.15pct) and 53.03% (year-on-year + 8.36pct) respectively. In 2022, the overall gross profit margin of Q1 company reached 60.62%, a record high; In terms of period expenses, the expense rate (excluding R & D) in 2021 was 8.27% (year-on-year -1.53pct), of which the sales expense rate was 5.28% (year-on-year -0.39pct), the management expense rate was 3.15% (year-on-year -0.17pct), and the financial expense rate was – 0.16% (year-on-year -0.96pct).
Accelerate the launch process of new products and build a domestic analog category “supermarket”
In 2021, the company’s R & D investment reached 378 million yuan (year-on-year + 82.55%), and the R & D expense rate reached 16.89%. A total of more than 500 new products were launched. The process of promoting new products was significantly accelerated compared with the two or three hundred models in 20172020.
The catalogue of product categories is increasingly enriched, and the domestic analog chip category “supermarket” is gradually built. Up to now, the company has nearly 3800 products available for sale in 25 categories, all of which are positive design, covering the two fields of signal chain and power management. They are widely used in consumer electronics, communication equipment, industrial control, medical instruments, automotive electronics and other fields, as well as various emerging electronic products such as the Internet of things, new energy, smart wear, artificial intelligence, smart home, smart manufacturing and 5g communication.
High prosperity continues, and attention is paid to investment opportunities of simulated track
As an indispensable key component of all electronic products, the analog chip market continues to be hot. According to icinsights data, the scale of the global analog chip market hit a record high of US $74.1 billion in 2021, achieving an unprecedented 30% year-on-year growth. It is expected that the market scale will continue to grow by 12% year-on-year to US $83.2 billion in 2022. According to the statistics of Frost & Sullivan, the global power management market is expected to grow to 52.56 billion US dollars by 2025. According to the data of China Economic Research Institute, the global signal chain market is expected to reach about 11.8 billion US dollars in 2023. At the same time, the self-sufficiency rate of analog chips in China is still at a low level. In 2020, the market share of the world’s top ten analog chip companies will reach 63%, of which the market share of Texas Instruments will reach 19%, and there is a wide space for domestic manufacturers to replace them.
We believe that the company is currently the leading manufacturer with the most abundant analog chip categories in China. Referring to the development process of international analog industry leaders, a perfect product catalogue is the core key to enhance market competitiveness. At the same time, China has become the largest consumer market of analog chips. The company is expected to benefit from the high boom of analog chip market and the wave of domestic substitution to achieve long-term sustainable development.
Profit forecast
It is predicted that the company’s revenue from 2022 to 2024 will be 3.641 billion yuan, 5.091 billion yuan and 6.540 billion yuan respectively, and the EPS will be 5.12, 7.19 and 9.28 yuan respectively. The corresponding PE of the current stock price will be 55, 39 and 30 times respectively, giving 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.
