\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 74 Changsha Jingjia Microelectronics Co.Ltd(300474) )
Event: on April 27, 2022, Changsha Jingjia Microelectronics Co.Ltd(300474) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 1.093 billion yuan, a year-on-year increase of 67.21%, a net profit attributable to the parent company of 293 million yuan, a year-on-year increase of 40.99%, and a net profit not attributable to the parent company of 256 million yuan, a year-on-year increase of 36.07%. In the first quarter of 2022, the company realized an operating revenue of 362 million yuan, a year-on-year increase of 70.34%, a net profit attributable to the parent company of 77 million yuan, a year-on-year increase of 58.20%, and a net profit not attributable to the parent company of 72 million yuan, a year-on-year increase of 57.31%. The performance in 2021 was in line with market expectations, and the performance in the first quarter of 2022 exceeded market expectations.
Key investment points
High performance growth and emphasis on R & D: GPU chip has high technical barriers, and the company continues to enhance its R & D strength. By the end of 2021, the company has 834 R & D personnel, accounting for more than 68.87% of the total number of employees, with a year-on-year increase of 42.08%. In 2021, the company’s R & D expense rate was 23.16% (- 3.98 PCT), the management expense rate was 10.36% (- 1.56 PCT), and the sales expense rate was 4.36% (+ 0.16 PCT). In the first quarter of 2021 and 2022, the overall gross profit margin of the company was 60.86% (- 10.29pct) / 56.17% (- 5.71pct) respectively, mainly due to the rapid increase in the proportion of chip business with low gross profit margin. In 2021 and the first quarter of 2022, the company carried out equity incentive to further enhance cohesion. Although the company accrued equity incentive fee of 50.72 million yuan in 2021, the net profit attributable to the parent company still maintained a rapid growth in 2021.
The chip business has increased significantly, and the prosperity of xinchuanggao is expected to drive the continuous high growth of the chip business: in 2021, the company’s chip business achieved a revenue of 447 million yuan, a significant year-on-year increase of 517.46%, accounting for 40.84% (+ 29.79pct) of revenue and 44.49% (+ 10.79pct) of gross profit margin. In 2021, the company’s 7-series products gained a high market share in the party and government market, realized large-scale shipment, released a new generation of 9-series products, and obtained 100000 large orders on March 17, 2022. In 2022, the party and government information and innovation market is expected to grow year-on-year, and the industry information and innovation market is expected to double. As the leader of domestic GPU, the company’s chip business is expected to maintain rapid growth.
The technology of military products is leading and is about to usher in an accelerated development period: in 2021, the company’s revenue of graphic display and control products was 521 million yuan, with a year-on-year increase of 12.35% and a gross profit margin of 72.41% (- 4.55pct); The revenue of small specialized radar products was 114 million yuan, with a year-on-year increase of 8.52% and a gross profit margin of 72.97% (-0.02pct). Relying on the advantages of independent GPU, the company’s graphic display and control products are leading in the technology industry and are expected to realize multi field applications. In 2021, the company will further develop and improve the technology of miniaturized and specialized radar products, which is expected to open new markets and realize large-scale production in the future. Military business is the company’s traditional advantageous business. In 2022, the company’s military business is expected to usher in a period of accelerated development.
Profit forecast and investment rating: in 2022, the prosperity of the information and innovation industry is expected to improve, the demand of the military industry is strong, the company’s product technology is leading, the talent reserve is sufficient, and the R & D investment is continuously increased. We are optimistic about the development prospect of the company as the leader of domestic GPU. Based on this, we raised the forecast of net profit attributable to parent company of Changsha Jingjia Microelectronics Co.Ltd(300474) 20222023 to RMB 435 (+ 0.26) / 574 (+ 0.46) million, and the forecast of net profit attributable to parent company in 2024 to RMB 746 million, maintaining the “buy” rating.
Risk warning: the promotion of localization policy is not as expected; China’s military expenditure and military industry informatization are less than expected; The company’s product R & D process is less than expected.
