\u3000\u3 Guocheng Mining Co.Ltd(000688) 798 Shanghai Awinic Technology Co.Ltd(688798) )
On April 25, Shanghai Awinic Technology Co.Ltd(688798) released the first quarterly report of 22 years, and the company achieved a revenue of 595 million yuan, a year-on-year increase of 20.11%; The net profit attributable to the parent company was 58 million yuan, a year-on-year increase of 73.66%.
Q1’s performance exceeded expectations and its business resilience was full: Q1 company achieved a revenue of 595 million yuan, a year-on-year increase of 20.11% and a month on month decrease of – 10.58%. Despite the impact of the Spring Festival holiday and the epidemic situation in Shenzhen, it still showed strong resilience; The gross profit margin of the company has continuously increased from 32.72% in Q1 in 21 years to 46.53% in Q1 in 22 years, and the profitability has continuously improved. Among them, the gross profit margin in Q1 has increased by 3.16pct month on month, mainly due to 1) in response to the price rise of the upstream wafer factory, the company appropriately raised the price and transmitted it to the downstream; 2) The volume of new products and new customers drives the improvement of gross profit margin. The net profit attributable to the parent company was 58 million yuan, with a year-on-year increase of 73.66% and a month on month decrease of 38.01%; Excluding the impact of the share based payment fee of 417605 million yuan, the net profit attributable to the parent company reached 992698 million yuan, with a year-on-year increase of 199.76% and a month on month decrease of 21.26%, exceeding market expectations. The decrease in profits was greater than the revenue on a month on month basis, mainly due to: 1) the reversal of asset impairment loss in Q4 in 21 was 18.56 million yuan, while the provision for asset impairment loss in Q1 in 22 was 8.68 million yuan, with a negative impact of 27.24 million yuan on a month on month basis; 2) Investment income decreased by 14.49 million yuan compared with Q4.
Continuously enrich the categories and improve the platform layout: the categories of the company are continuously enriched, with more than 200 models added in 2021 and about 800 models accumulated; The product subclass reaches 41 categories. The company’s leading market share in audio, motor and other fields has demonstrated the company’s strong technical competitiveness. With the solid accumulation of basic skills of Analog IC, superposition algorithm, MCU and other core technologies, the company’s categories continue to expand and improve the platform layout. Long life cycle products such as charger, LDO, charge pump and DCDC gradually usher in large quantities, which will boost the company’s gross profit margin.
The basic sector of mobile phones is steadily rising, and new markets such as aiot and industry are vigorously developed: the mobile phone market is the basic sector for the rapid development of the company. At present, the company enters new customers such as Samsung and continues to launch new material numbers, and the basic sector is steadily rising. At the same time, the company has made rapid efforts in the industrial, automobile and aiot markets, and the proportion of non mobile phone revenue has increased to more than 30%. Among them, aiot has entered many international well-known brands such as Facebook, Amazon and Google and become strategic partners, security has entered Hangzhou Hikvision Digital Technology Co.Ltd(002415) and other customers, and automotive electronics has entered Byd Company Limited(002594) , Chery and Geely, actively embracing the star sea of industry + automobile.
Attach importance to the construction of R & D team and continuously increase R & D Investment: the company attaches importance to R & D, and the number of employees has increased from 209 in 2018 to 985 at the end of 21, of which R & D technicians account for 77.56%. In the past 21 years, the company has attracted and retained talents through equity incentive. In the past 22 years, the R & D expense rate in Q1 was as high as 24.9%, laying the foundation for subsequent high growth.
Investment suggestion: we expect the net profit attributable to the parent company in 2022 / 23 / 24 to be RMB 409 / 591 / 945 million respectively, corresponding to the closing price PE on April 25, 2022 to be 54 / 37 / 23 times respectively. The company continues to expand its categories around the digital analog hybrid field, highlights the platform layout, and is continuing to explore the non mobile phone downstream market, which will create a new growth point for the company. Maintain a “recommended” rating.
Risk warning: product R & D risk; Risk of declining prosperity of the industry; Market competition risk.
