\u3000\u3 Guocheng Mining Co.Ltd(000688) 008 Montage Technology Co.Ltd(688008) )
Performance review
The first quarter was in line with expectations: on April 28, the company announced that the first quarter revenue in line with market expectations was 900 million (accounting for 23% of wind’s annual forecast), a month on month decline of 7 points, a year-on-year increase of 201%, the net profit attributable to the parent company reached 306 million (accounting for 22% of wind’s annual forecast), a year-on-year increase of 128%, and the net profit not attributable to the parent company was 231 million, a year-on-year increase of 211%.
The gross profit rate is slightly lower than expected: Although the proportion of memory interface chips with high gross profit margin increased from 62% in the fourth quarter of last year to 64% in the first quarter, it is due to the increase of ddr5 supporting chips with lower gross profit margin (profit sharing) in cooperation with Zhixin / Juchen (power management / Zhixin, serial detection / Juchen, temperature sensing chip / Zhixin), As a result, the overall gross profit margin of the company fell from 47% in the fourth quarter of last year to 43% in the first quarter.
The view on the year-on-year recovery of memory interface chips this year and next remains unchanged: Although the sapphire rapids / Genoa server CPU supporting server ddr5 module will output in the second half of the year (especially in the fourth quarter, accounting for more than 10%), we maintain the view that the strong year-on-year recovery of revenue / profit next year remains unchanged, mainly because Intel / AMD will ship Intel 7 sapphire rapids and 5nm Genoa CPU in the third quarter, Both support 30% high-level ddr5 memory interface chips, increase the proportion of 10 plus 1 scheme, support serial detection, temperature sensing, power management chips, support 12 memory channels (AMD 5nm CPU), PCIe Gen 5.0 retimer, and relatively stable server memory module market. These driving forces will make LanChi’s revenue and profit rise strongly year-on-year from 2022 to 2024.
Investment advice
We maintain the “2024 GRE” net profit of 100% and maintain the “2024 GRE” net profit target.
Risk tips
The short-term memory and server industry is down, the selling pressure of dispersed equity and the logistics impact of China’s sealing control. Intel’s delay in the mass production plan of sapphirerapids is the main risk.
