\u3000\u3 Guocheng Mining Co.Ltd(000688) 981 Semiconductor Manufacturing International Corporation(688981) )
Event:
The company released its annual report for 2021: in 2021, the company achieved a revenue of 35.631 billion yuan (a year-on-year increase of 29.70%), and a net profit attributable to the parent company of 10.733 billion yuan (a year-on-year increase of 147.75%), of which the revenue of 2021q4 in a single quarter was 10.260 billion yuan (a year-on-year increase of 53.79%, a month on month increase of 10.55%), and the net profit attributable to the parent company of 3.415 billion yuan (a year-on-year increase of 172.73%, a month on month increase of 64.
The performance reached a new high in 2021, fully benefiting from the high prosperity of the industry. Benefiting from the imbalance between supply and demand in the industry, the volume and price of the company’s products increased, superimposing the changes of the company’s product portfolio, driving the rapid growth of the company’s performance. In 2021, the company’s capacity utilization rate reached 99.4%, maintaining a high level. The equivalent 8-inch wafer sales volume was 6.7472 million pieces (year-on-year + 18.4%), the average selling price reached 4763 yuan (year-on-year + 13.14%), and the overall gross profit margin in 2021 was 29.3% (year-on-year + 5.5pct). From the perspective of process nodes, FinFET / 28nm performed well. In 2021, the company’s FinFET / 28nm revenue accounted for 15.1% (year-on-year + 5.9pct), 40 / 45nm node revenue accounted for 15.0% (year-on-year -0.6pct), 55 / 65nm node revenue accounted for 29.2% (year-on-year -1.3pct), and 90nm and above node revenue accounted for 3.2% (year-on-year + 0.4pct), 0.15/0.18 μ M-node revenue accounted for 28.7% (year-on-year -3.9pct). From the perspective of downstream applications, smart phones accounted for 32.2% (year-on-year – 12.2pct), smart homes accounted for 12.8% (year-on-year – 4.3pct) and consumer electronics accounted for 23.5% (year-on-year + 5.3pct) in 2021. In terms of three expenses, the company’s overall period expense rate (excluding R & D) in 2021 was 3.08% (year-on-year + 1.25pct), of which the sales expense rate was 0.49% (year-on-year -0.24pct), the management expense rate was 4.61% (year-on-year -1.08pct), and the financial expense rate was – 2.02% (year-on-year + 2.57pct). In terms of capital expenditure, it is estimated that the capital expenditure in 2022 will be 32.05 billion yuan.
The downstream demand of mature process is broad, and the expansion of production consolidates the company’s leading position in the industry. The R & D cost of the company in 2021 was 4.121 billion yuan, and the technology R & D progressed smoothly: the 55nm BCD platform entered the product introduction, the 55nm and 40nm high-voltage display drive platforms entered the risk mass production, and the 0.15 micron high-voltage display drive entered the mass production. In terms of advanced technology, the development of multiple derivative platforms of the company is carried out as planned and steadily introduced to customers. The goal of product diversification is being realized, and the research and development of characteristic technology continues to be promoted. In the short term, as the leader of China’s wafer foundry, the company is expected to enter mass production in 2022h2 with high growth certainty under the background of high prosperity in the industry and with the completion and operation of new projects such as Beijing and Lingang. In the medium and long term, the downstream demand for power management, RF and image signal processing is strong. The company’s overweight layout and mature process are expected to continue to benefit from the wave of domestic substitution, improve the market share and consolidate the leading position in the industry.
Profit forecast and investment rating: wafer fabrication is the key to China’s semiconductor industry chain to achieve independent control. As the Chinese mainland’s leading foundry leader, the company has perfect technology process, advanced technology, and continuously increased its layout and mature process. Under the background of high industry boom and domestic substitution, the company is expected to continue to benefit. We expect that the net profit attributable to the parent company from 2022 to 2024 will be RMB 11.182122.43/13.497 billion respectively, the corresponding EPS will be RMB 1.41/1.55/1.71/share respectively, and the corresponding current PE valuation will be 30 / 27 / 25 times respectively, maintaining the “buy” rating.
Risk warning: the downstream demand is less than the expected risk; The company’s production expansion process is less than the expected risk; Risk that the progress of customer import is less than expected; Risk of external environment change; The risk of recurrent outbreaks.
