\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 61 Sg Micro Corp(300661) )
Key investment points
Event: Sg Micro Corp(300661) released the first quarter report of 2022. Q1 company achieved revenue of 775 million yuan in 2022, with a year-on-year increase of 96.8%; The net profit attributable to the parent company was 260 million yuan, a year-on-year increase of 245.0%; Net profit deducted from non parent company was 247 million yuan, with a year-on-year increase of 241.8%.
Q1 revenue grew rapidly and gross profit margin continued to rise. The company achieved a revenue of 775 million yuan in Q1 of 2022, with a year-on-year increase of 96.8% and a month on month increase of 10.3%. In 2022, the net profit attributable to the parent company in Q1 was 260 million yuan, an increase of 245.0% year-on-year and 4.9% month on month. The company actively expanded its business when Q1 was relatively the off-season of the industry, increased product sales, and achieved high-speed growth year-on-year and continuous growth month on month. The comprehensive gross profit margin of Q1 products was 60.62%, an increase of 12.75 percentage points over the same period last year, and an increase of 3.46 percentage points over the fourth quarter of last year, showing a brilliant performance. Revenue grew rapidly and gross profit margin increased steadily.
During this period, the expense rate continued to decline, the operating efficiency was improved, and the R & D investment was further increased. The company’s Q1 management rate in 2022 was 2.65%, a decrease of 0.48pct compared with the same period last year; The sales rate was 4.91%, down 1.64 PCT from the same period last year; The financial expense ratio was – 0.30%, a decrease of 0.16pct compared with the same period last year; The R & D rate was 15.63%, down 1.94pct from the same period last year. With the continuous expansion of the company’s revenue scale, although the company’s period expenses have increased, the period expense rate has decreased, indicating that the company’s operating efficiency has been continuously improved and the scale effect has gradually appeared. In 2022, Q1 company’s R & D expenditure was 121 million yuan, with a year-on-year increase of 75.1%. The continuous increase in R & D investment ensured the speed of the company’s introduction of new products and laid the foundation for the company’s further platform expansion and development. During this period, the cost rate decreased steadily and the R & D investment continued to grow.
Categories and market share continue to expand, localization market space is broad, and high growth can be expected in the future. At present, the self-sufficiency rate of China’s analog IC market is still low. According to the data of China Semiconductor Association, the self-sufficiency rate of China’s analog chips is only 12% by 2020. As a leading analog IC enterprise in China, the company has broad market development space. On the one hand, the company has further accelerated the expansion of product categories by continuously increasing R & D investment, looking for suitable M & A projects, and actively absorbing excellent R & D personnel and teams. According to the company’s annual report, the company launched two or three hundred new products every year from 2017 to 2020, while the number of new products launched by the company increased to more than 500 in 21 years, with a significant increase in growth rate and extensive coverage of various product categories. On the other hand, the breadth and depth of cooperation between the company and downstream customers have also been continuously improved, ensuring user stickiness and expanding market share. In conclusion, we believe that the company is weakly affected by the differentiation of landscape and is expected to achieve sustained high growth in the next few years. By consolidating technical advantages internally and seizing M & A opportunities externally, Shengbang is expected to become an international analog IC giant.
Investment suggestion: considering that the company, as the leading analog IC company in China, has broad growth space and strong development momentum, and the continuous expansion of category and market share will bring about considerable performance growth in the next few years, we estimate that the company’s operating revenue in 20222024 will be RMB 3.498/5.018/6.453 billion respectively, the net profit attributable to the parent company will be RMB 1.109/15.97/2.106 billion respectively, and the corresponding PE will be 60/42/31 times respectively, maintaining the “buy” rating.
Risk tips: upstream price rise risk, core personnel loss risk, new product R & D and market competition risk.
