\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
The company released the first quarterly report of 2022. The company’s revenue in 2022q1 was 776 million yuan, a year-on-year increase of 54.54%; The net profit attributable to the parent company was 233 million, with a year-on-year increase of 169.62%; Net profit deducted from non parent company was 226 million yuan, with a year-on-year increase of 217.81%. Among them, 2022q1 company’s stock incentive amortization share based payment expense is about 369506 million yuan. China’s semiconductor boom continued, with strong demand for downstream applications. The company diversified its industrial chain layout, strengthened capacity guarantee, and actively explored markets and new customers. The gross profit margin increased significantly and the profitability increased significantly.
The proportion of products with high gross profit margin increased significantly, and the gross profit margin was optimized significantly. In 2022q1, the revenue of security and identification chips is about 215 million, accounting for 27.71%; Nonvolatile memory is about 246 million yuan, accounting for 31.70%; Smart meter chip is about 102 million yuan, accounting for 13.14%; FPGA and other chips are about 171 million yuan, accounting for 22.04%. Among them, the relatively high gross profit margin businesses: nonvolatile memory, FPGA and other chips increased by 3.72pct and 5.46pct respectively compared with the whole year of 2021. In addition, the price of some products of the company increased, making the comprehensive gross profit margin of 2022q1 company reach 63.59%, an increase of 12.46pct year-on-year.
We have been deeply engaged in IC Design for more than 20 years, based on the diversified layout of our main business. The company is the first listed enterprise in China’s integrated circuit design industry. RFID chip, smart card chip, EEPROM, smart meter MCU and other products rank at the forefront of the industry. FPGA chip design is leading in China. The company’s products are widely used in finance, social security, transportation, electronic license, intelligent computing and other fields, and are deeply recognized by Samsung, LG, vivo, Haier, Hisense, Lenovo and other international well-known brands. The company attaches importance to R & D investment. In 2022q1, the R & D investment totaled 199 million (including equity incentive), with a year-on-year increase of 51.28% and a R & D expense rate of 25.60%.
FPGA chip production and sales are booming, and high-end and large-scale build a new growth pillar. According to Frost & Sullivan, in the future, with the vigorous development of AI and 5g technology, the demand of emerging markets will continue to grow. The market scale of FPGA is expected to reach about US $12.58 billion in 2025 and the CAGR will be about 16.4% from 2020 to 2025; China’s FPGA market will reach 33.22 billion yuan in 2025. The technology breakthrough of Chinese FPGA manufacturers is expected to accelerate the growth in the future. The company is in a leading position in the field of FPGA chip design in China. Its products are mainly used in the field of high reliability and strong profitability. The company is actively promoting the development of a new generation of 14 / 16nm 1 billion gate products, and further enriching the types of 28nm FPGA and PSoC chips to expand new markets. By the end of 2021, the company had sold 28nm related FPGA products to 300 + customers.
The business line has blossomed at multiple points, the application field has been continuously expanded, and many products have been certified by vehicle regulations. 1) Security and identification chip: smart card and security chip fm1280 and smart device FM17 series read-write chip have been certified by aec-q100; UHF RFID chip, UHF read-write chip and security se chip are continuously developed and are expected to be mass produced in succession. 2) Nonvolatile storage: it has successively introduced leading customers in the fields of network communication, IPC (network camera), wearable, WiFi 6, display screen and so on, and many projects in the field of automotive electronics have been successfully mass produced. 3) Smart meter chip: LG series MCU of the company has successfully obtained aec-q100 certification and can be used for vehicle wipers, windows, seats, door locks, air conditioners, electronic shifters, etc. We expect the company’s revenue to be 3.647/48.54/6.213 billion yuan in 2022 / 2023 / 2024; The net profit attributable to the parent company is 850 / 1200 / 1440 million yuan; Corresponding to pe50 4 / 35.7 / 29.8x, maintain the “buy” rating.
Risk tip: downstream demand is less than expected, Sino US science and technology friction
