\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )
The performance guidance of the second quarter is bright, and the 3 + n strategy starts. In 2022q1, the company achieved a revenue of 5.538 billion yuan, yoy-10.84%, qoq-4.33%, and a net profit attributable to the parent company of 896 million yuan, yoy – 13.90%, QoQ – 6.42%, deducting 902 million yuan of non attributable net profit, yoy – 4.45%, QoQ – 3.52%. The gross profit margin of 22q1 was 35.3%, increased by 2.9% year on year, decreased by 1.2% month on month, and the net profit margin of 2022q1 was 16.2%, decreased by 0.6% year on year and 0.4% month on month.
In addition, the company expects that the net profit attributable to the parent company in 2022q2 is expected to increase by no less than 50% month on month, so the net profit attributable to the parent company in 2022q2 is expected to be no less than 1.344 billion yuan, with a year-on-year growth rate of no less than 11.77%. The company has gradually improved its 3 + n strategy and is committed to becoming an international leading provider of mixed signal chips. “3” refers to three basic disk businesses: CIS, analog and touch display; “N”: Weihao Chuangxin empowerment, based on the collaboration of common IP, supply chain and customer base, continues to cultivate emerging high-speed growth businesses, forming a multi product line, multi application and balanced development pattern overseas in China.
The mobile CIS product matrix has been continuously improved, and the share of on-board CIS has accelerated. The global smart phones are in the trend of slight increase in fluctuation. The market share of glory succession Huawei has increased rapidly, and the shipment volume of 21q4 ranks first among domestic brands. Smartphone shooting is developing towards the actual needs of users. It is expected that the mainstream number of mobile phone main cameras will remain at 3 ~ 4 in the next few years, while the demand for high pixels, “big bottom” and high-speed photography is becoming increasingly significant. We believe that the improvement of the demand for shooting experience will become the main driving force for the growth of CIS unit price and market scale. Howay smart phone CIS has successfully broken the high-end situation. Following the market demand, the company continues to launch new products to fill the demand of various price bands. For example, four of the five cameras of Magic V, the flagship 5g high-end folding screen made by glory in the beginning of the year, adopt howay products. We expect the value of a single machine to reach US $25. In the car CIS ten billion dollar competition, Howell has been deeply cultivated for 15 years and entered the harvest period of customer orders. As the global top 2 supplier, its products continue to iterate and fully benefit from the industry dividend.
Touch and display: high synergy brings massive growth. In 2021, the supply and demand of LCD driver chips are particularly tight. Trendforce predicts that the supply and demand of LCD driver chips will stabilize in 2022, and OLED driver IC is still tight. It is worth noting that with the accelerated improvement of the level of electric and intelligent vehicles, the demand for tddi in the automotive field is growing rapidly. After integrating Xinsi tddi, relying on the advantages of Weill’s supply chain and sales resources, and superimposing the high synergy between tddi and CIS at the customer level, the company’s tddi is expected to accelerate the volume and continuously improve the market share. In addition, the company’s tddi and AMOLED driven IC fields will also continue to launch new products and upgrade iteratively, thickening the ceiling of revenue scale. Weihao Chuangxin empowers and extends the layout of automotive electronics. Weihao Chuangxin has invested in a number of high-quality automotive electronics related manufacturers to help the group expand from vehicle cis to more automotive electronics products, form strong synergy with the company’s existing business, and layout the supply chain to increase the company’s production capacity of new products in the future; We believe that the key to the study of Will Semiconductor Co.Ltd.Shanghai(603501) in the next 3-5 years lies in the tracking analysis of the company’s ecosystem. At present, from the perspective of public disclosure, Weihao Chuangxin investment includes JINGLUE semiconductor, Aixin technology, horizon, Gettopacoustic Co.Ltd(002655) , etc. The total value of products that the company can provide for bicycles is expected to increase, so as to deeply benefit from the general trend of increasing automobile silicon content.
Weill’s core lies in the continuous expansion of platform. The company continues to increase R & D investment, cooperate with head customers, and the R & D mode is close to the leading foreign industrial chain, and the business synergy is becoming more and more prominent. The annual production capacity is expected to continue to expand. The original product line (discrete, analog, RF, etc.) is expected to increase significantly in 3-5 years. The company’s multi-point layout and multi-channel parallel development have continuously carried out the layout of major products, broadened the growth space, reflected the Matthew effect, and the platform layout has gradually blossomed and fruited. We expect the company to realize a net profit attributable to the parent company of RMB 5.98/80.5/10.02 billion from 2022 to 2024, corresponding to PE of 19.7x/14.7x/11.8x, maintaining the “buy” rating.
Risk warning: the downstream demand is less than expected, and the progress of new product research and development is less than expected
