\u3000\u3 Guocheng Mining Co.Ltd(000688) 396 China Resources Microelectronics Limited(688396) )
Event:
The company released the annual report of 2021 and the financial report of 2022q1. In 2021, the operating revenue was 9.249 billion yuan, a year-on-year increase of 32.56%; The net profit attributable to the parent company was 2.268 billion yuan, a year-on-year increase of 135.34%. In 2022q1, the growth momentum continued, and the revenue and net profit attributable to the parent company were RMB 2.514619 billion respectively, with a year-on-year increase of 22.94% / 54.88% respectively.
Comments:
The profitability remained high and the power device business played a leading role
The gross profit margins of 21q4 and 22q1 were 35.05% / 36.51% respectively, with a year-on-year increase of 9.12/5.04pct respectively; The net interest rate was 25.09% / 24.27% respectively, with a year-on-year increase of 10.62/4.35pct respectively. The company has high capacity utilization, continuous improvement of product and customer structure, and maintained high profitability. In 2021, the sales revenue of the power device business group increased by 35% year-on-year, the net profit increased by about 150%, and the gross profit margin increased by 12 percentage points year-on-year, which was significantly higher than the year-on-year increase of the overall sales gross profit margin, driving the significant improvement of the company’s overall profitability.
IGBT / SiC related power products continue to make breakthroughs and increase the layout of 12 inch production capacity
In 2021, the company’s power device business performed well, in which the revenue of MOSFET products increased by 33% year-on-year, the competitive advantage of medium and low voltage MOSFET expanded, and the revenue of high-voltage superjunction MOSFET exceeded 100 million; The sales revenue of IGBT products increased by 57% year-on-year, actively expanding customers in the fields of automobile, photovoltaic and industrial control, and has entered the vehicle application; SiC series products, self-developed planar 1200V SiC MOSFET has entered the risk mass production stage, and the static technical parameters have reached the level of foreign benchmarking samples. In 2021, the company set up Runxi wafer factory with big fund and Chongqing Xiyong. After completion, it is expected to form a 12 inch medium and high-end power semiconductor wafer production capacity of 30000 pieces / month, and build a supporting 12 inch epitaxial and wafer process capacity. It is expected to be put into operation in the second half of 2022, which will help to enhance the company’s production guarantee ability and product competitive advantage.
Profit forecast and investment suggestions
The company’s performance in 2021 is in line with expectations. We expect the company’s revenue from 2022 to 2024 to be 107.13/125.60/14.615 billion yuan respectively, the net profit attributable to the parent company to be 26.08/30.33/3.455 billion yuan respectively, the EPS to be 1.98/2.30/2.62 yuan per share respectively, and the corresponding PE to be 24 / 21 / 18 times respectively. Considering the downward shift of the overall valuation center of the industry, 30 times PE is given for the profit forecast in 2022, and the target price is 59.26 yuan, maintaining the “buy” rating.
Risk tips
Downstream demand is less than expected, capacity expansion is less than expected, overcapacity and other risks in the industry in the future
