\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
202201 performance exceeded expectations, product and market structure were optimized
Key investment points
Event: in 2021, the company realized an operating revenue of 1.498 billion yuan, a year-on-year increase of + 56.89%, and a net profit attributable to the parent company of 410 million yuan, a year-on-year increase of + 194.55%; In 2022q1, the operating revenue was 421 million yuan, a year-on-year increase of + 30.79%, a month on month increase of + 5.45%, and the net profit attributable to the parent company was 112 million yuan, a year-on-year increase of + 50.11%, a month on month increase of + 12.70%, exceeding the upper limit of performance forecast. If the 19.08 million yuan of expenses allocated and withdrawn by the company for 202201 equity incentive are added back, the net profit attributable to the parent company in 202201 will reach 131 million yuan, with a year-on-year increase of + 75.59% and a month on month increase of + 31.83%.
The industry boom continued and the profitability improved in the first quarter. According to the prediction of China Semiconductor Industry Association, the demand for discrete devices in China will reach 439320 billion yuan in 2023, an increase of 30.28% over 2021. In the medium and long term, China's discrete device market is expected to maintain a prosperous trend. Since 2021, focusing on market demand, the company has actively optimized its product structure, explored emerging markets and achieved double growth in scale and efficiency. In the first quarter of 2022, the gross profit margin reached 50.26%, with a year-on-year increase of + 9.29pcts and a month on month increase of + 3.5lpcts, and the profitability continued to increase. The shielded gate MOSFET and IGBT are loaded quickly, and the product structure is continuously improved. The company's products mainly include MOSFET and IGBT. Grooved MOSFET is the mature process platform with the longest continuous mass production time of the company. In 2021, its business proportion was reduced to 45.31%, and more resources were allocated to shielded gate MOSFET and IGBT products. The former is the product that replaces the most product number of international first-class manufacturers among the company's medium and low voltage products, accounting for 38.96% from 31.69%; The latter, as a fast and large-scale product, increased its sales proportion from 1.34% to 5.39% in 2021
The demand of photovoltaic and automobile markets is strong, and the market structure of the company continues to improve. Power semiconductors are widely used downstream. On the one hand, "double carbon" has brought rapid growth demand to the photovoltaic market. The company's IGBT and MOSFET products have been sold in large quantities in China's leading enterprises, and announced that the photovoltaic inverter and energy storage field will become an important performance growth point in 2022; On the other hand, the trend of automotive electronics and intelligence will drive the rapid increase of automotive power semiconductors. In 2021, many products of the company have been subject to aec-q101 standard certification, and some products have entered many brand whole machine parts factories, focusing on the introduction of Byd Company Limited(002594) , taking a step ahead of the localization of automotive electronics. It is proposed to raise RMB 1.418 billion through non-public offering to further broaden the company's capacity boundary. The company issued a fixed increase plan to raise funds, focusing on the future development trend of power semiconductors, focusing on the three project days of third-generation semiconductor SiC / GaN power devices and packaging and testing, power drive IC and intelligent power module (IPM), SiC / IGBT / MOSFET power integration module, which is conducive to consolidating the company's market position, improving the company's sustainable profitability and ensuring the sustainable development in the future.
Investment suggestion: maintain the "overweight" rating. It is estimated that the company's EPS in 2022, 2023 and 2024 will be 3.39, 4.11 and 5.26 yuan respectively, corresponding to 38, 32 and 25 times of PE. The company is one of the leading IGBT / MOSFET enterprises in China. In line with the localization substitution and industry boom, the performance is expected to maintain steady growth and maintain the "overweight" rating
Risk warning: downstream demand is less than expected, product and customer expansion is less than expected, and OEM capacity is less than expected
