\u3000\u3 Guocheng Mining Co.Ltd(000688) 766 Puya Semiconductor (Shanghai) Co.Ltd(688766) )
Event: the company released the report for the first quarter of 2022. In 2022q1, the operating revenue was 224 million yuan, a year-on-year increase of – 4.91%; The net profit attributable to the parent company was 42 million yuan, a year-on-year increase of + 8.07%; The non net profit deducted was 39 million yuan, a year-on-year increase of + 0.73%.
Comments: the year-on-year decline in the company’s 2022q1 revenue is mainly due to the existence of the Spring Festival holiday in the first quarter, which is a traditional off-season and weak demand; In addition, affected by the epidemic, the logistics capacity in some areas is limited, and the shipment volume of Q1 has decreased slightly compared with the same period. The year-on-year increase in net profit was mainly due to the increase in gross profit brought by the increase in gross profit margin, which made up for the increase in expenses brought by the increase in personnel and R & D investment.
Norflash + EEPROM, large capacity and high reliability market, opening the second growth curve. In the past three years, the company’s performance and net profit have continued to expand, and the advantages of product technical barriers have laid a market position for it. We are firmly optimistic about the growth momentum of the company driven by the high boom of memory chips and domestic alternative logic.
The downstream consumer electronics + Internet of things market demand is booming, and the company is optimistic about the continuous high growth of revenue. The process and application scenarios of memory chips are constantly iterative and upgraded, and the requirements of downstream customers for chip performance are becoming more and more diverse. In particular, the rise of wearable devices and Internet of things devices has increased customers’ requirements for chip power consumption, area and other performance. Norflash of the company adopts 55nm and 40nm processes norflash, with a capacity of 512kb-128mb, which meets the needs of most terminal application markets. EEPROM products cover 2kbit to 1mbit capacity, and end customers include many mobile phone + home appliance manufacturers. The continuous expansion of the supply proportion of the company’s major customers also confirms the success of Puya Semiconductor (Shanghai) Co.Ltd(688766) product strategy and the excellent competitiveness of its products. Under the background of the continuous boom in the market demand for consumer electronics and Internet of things terminal applications, we are optimistic that the substitution of similar products can leverage the inventory market and drive the continuous and rapid growth of the company’s operating revenue in the future.
The optimization of product and customer structure increased the gross profit margin, and the net profit attributable to the parent company increased rapidly. The company continues to optimize the product and customer structure and improve the comprehensive gross profit margin. In 2022q1, the company’s gross profit margin was 33.42%, an increase of 5.61 percentage points over the same period of last year, mainly due to (1) the company’s continuous adjustment of product structure and downstream application structure, and the overall average unit price of the company’s products increased year-on-year; (2) The proportion of norflash shipments under the 40nm process node of the company’s SONOS process platform has increased, with a better gross profit level than that under the same capacity of the 55nm process node. The company’s main products are continuously optimized, and the performance and specifications are continuously improved on the basis of product differentiated services. The company’s norflash products adopt SONOS basic process technology. Compared with the mainstream process technology etox, SONOS has great advantages in power consumption and production cost; The company’s EEPROM products have reached the level of international competitors in terms of reliability (including erasure times, storage time), working voltage and other key performance indicators. In the continuous research and development of consumer EEPROM products and vehicle EEPROM products, the terminal application scope of the products is expected to be further expanded.
Hold the advantage of small and medium capacity long board + enter the large capacity norflash market, optimistic about the dual technology route and open the second growth space. At present, the company promotes the research and development of medium and large capacity norflash from the two technical routes of SONOS and etox. Large capacity norflash market has the characteristics of strong customer stickiness and high gross profit margin, which is conducive to the company’s long-term sustainable development and brand accumulation. In the upgrading, R & D and industrialization project of NOR flash memory chip, the company takes its own strategic planning as the guidance and aims at the product market with high capacity and high reliability. Products under development include: 40nm norflash series memory chips; Newgennorflash series memory chips. Cutting into the automotive electronics market, 5g base station and other industrial markets and high-capacity Internet of things equipment market can improve the company’s norflash business development space. We are optimistic about the long-term and stable growth of the company’s business performance.
Investment suggestion: continue to be optimistic about the growth potential of the company. It is estimated that the net profit attributable to the parent company in 22-24 years will be 366 / 484 / 653 million yuan respectively; The corresponding EPS is 10.10/13.35/18.03 yuan / share respectively, maintaining the “buy” rating.
Risk tips: increased competitive pressure, expiration of SONOS process technology authorization, accounts receivable risk, supplier concentration risk, technical iteration risk of norflash and EEPROM products, and rise risk of wafer and sealed test price
