\u3000\u3 Guocheng Mining Co.Ltd(000688) 385 Shanghai Fudan Microelectronics Group Co.Ltd(688385) )
Event: Shanghai Fudan Microelectronics Group Co.Ltd(688385) april 27 released the first quarterly report of 2022. In 22q1, the company achieved a revenue of 776 million yuan (YoY + 54.54%, QoQ + 4.07%), a net profit attributable to the parent company of 233 million yuan (YoY + 169.62%, QoQ + 84.51%), and a net profit attributable to the parent company of 226 million yuan (YoY + 217.81%, QoQ + 108.92%), which is at the upper limit of the early performance guidance range. In addition, the company’s 22q1 generated a one-time equity incentive fee of 369506 million yuan. After restoration, the net profit attributable to the parent company of 22q1 was 270 million yuan.
The performance of 22q1 exceeded expectations, and the revenue and profit reached a record high in a single quarter. Thanks to the optimization of the company’s order structure and supply chain, the company has maintained a record high year-on-year growth, and the company has benefited from the continuous diversification of its product structure and downstream revenue. The gross profit margin of 22q1 company reached 63.59% (YoY + 12.45pct, QoQ + 2.83pct), also reaching a record high, mainly due to the improvement of product structure and the increase of the price of some products. In addition to the improvement of gross profit margin, the growth rate of profit side of 22q1 company is significantly higher than that of revenue side, mainly due to the obvious improvement of expense rate. The sales / management / R & D / financial expense rate of 22q1 company is 6.6% / 3.8% / 21.7% / – 0.1% respectively, which is 0.4/0.8/7.1/0.2pct higher than that of 21q4 month on month, respectively. The obvious improvement of R & D expense rate is mainly due to the impact of the annual R & D promotion rhythm, and the R & D project of 22q1 company has less expenses other than salary, As a result, the R & D cost rate has improved significantly.
The collaborative development of multiple services and FPGA products. According to the product line, the revenue of 22q1 company’s security and identification chip is about 215 million yuan, the non-volatile memory is about 246 million yuan, the smart meter chip is about 102 million yuan, the FPGA and other chips are about 171 million yuan, and the test service revenue (after merger and offset) is about 43 million yuan. Among them, nonvolatile memory, FPGA and other chips continued to maintain month on month growth on the basis of 21q4 high base, with month on month growth of 46.4% and 38.8% respectively, highlighting the high prospect of the industry and the full downstream orders of the company. The company’s nonvolatile memory includes EEPROM, norflash, slcnandflash and other memory products. In 2021, the company continued to expand its market share in three dimensions: stable supply chain, advanced process and market coverage, realizing a revenue of 721 million yuan (YoY + 41.56%) and a gross profit margin of 55.65% (YoY + 10.32pct).
FPGA and other highly reliable products are fast and large-scale, leading technology and promising. The company is the first manufacturer to launch 100 million gate FPGA products in China. In Q2, 2018, it took the lead in launching 28 nm 100 million gate FPGA products. By the end of 2021, it has sold related FPGA products based on 28 nm to more than 300 customers. At the same time, the company has the first PSoC to be introduced to the market in China. This product can meet the needs of application fields such as high-speed communication, signal processing, image processing and industrial control, and the market response is good. At present, the company is actively developing a new generation of 1 billion gate level products based on 14 / 16nm process, further enriching the types of 28nm process FPGA and PSoC chips, maintaining the leading technology of domestic FPGA, and the market share is expected to continue to increase.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 2022 / 23 / 24 will be 703 / 905 / 1183 million yuan respectively, and the corresponding current price PE will be 61 / 47 / 36 times respectively. The company is a leading large-scale IC design company in China. FPGA and other highly reliable businesses are technologically advanced in China, and are in the stage of rapid growth, maintaining the “recommended” rating.
Risk warning: the risk of downstream market fluctuation; The risk of intensified market competition; R & D progress is less than expected.
