\u3000\u3 Guocheng Mining Co.Ltd(000688) 008 Montage Technology Co.Ltd(688008) )
Events
After hours on April 28, the company disclosed the annual report of 2021 and the report of the first quarter of 2022
(1) in 2021, the company achieved an operating revenue of 2.562 billion yuan, an increase of 40.49% year-on-year; The net profit attributable to the parent company was 829 million yuan, a year-on-year decrease of 24.88%; The net profit attributable to the parent company after deduction was 617 million yuan, a year-on-year decrease of 18.73%.
(2) the company achieved an operating revenue of 900 million yuan in the first quarter of 2022, an increase of 200.61% year-on-year; The net profit attributable to the parent company was 306 million yuan, a year-on-year increase of 128.23%; The net profit attributable to the parent company after deduction was 231 million yuan, an increase of 210.96% year-on-year.
With the gradual penetration of ddr5, the annual performance reversed in Q4, and the profitability rebounded significantly
(1) during the reporting period, the company’s main profit source DDR4 memory interface chip entered the late stage of the product life cycle, and the product price decreased compared with the previous year. At the same time, ddr5 related products were officially mass produced and shipped in the fourth quarter of 2021, resulting in the gross profit margin of interconnection chip product line decreasing from 73.22% in the previous year to 66.72% in 2021. As ddr5 began to penetrate, the company’s 21q4 performance reversed, realizing a net profit of 257 million yuan after deducting non recurring profits and losses, with a month on month increase of 40.32% and a year-on-year increase of 236.67%.
(2) the gross profit margin of Jinchuan server platform was lower than that of interconnect chip product line, which pulled down the overall gross profit margin in the second half of the year. In 2021, the company achieved an operating revenue of 2.562 billion yuan, an increase of 40.49% over the previous year, mainly because after early marketing and customer cultivation, Jinchuan CPU business made a breakthrough. The sales revenue of Jinchuan server platform product line in 2021 was 845 million yuan, an increase of 275092% over the previous year. The product line cost of Jinchuan server platform with large growth in operating revenue is high, and its gross profit margin is 10.22%.
(3) in 2021, the sum of the company’s fair value change income and investment income from investment decreased by 84 million yuan compared with the previous year.
The decline in revenue in the first quarter was due to seasonal fluctuations in server shipments
Q1 revenue basically met expectations, but the profitability of interconnect chip products decreased. The revenue of 22q1 interconnection chip products decreased slightly from 601 million yuan in 21q4 to 575 million yuan, and the revenue of server products decreased slightly from 368 million yuan in 21q4 to 325 million yuan, which belongs to the seasonal fluctuation of normal server shipment. At the same time, due to the spread of the epidemic in Shanghai at the end of March, some orders of the company were delayed due to the impact of logistics. The gross profit margin of interconnection chip products fell from 69.21% to 60.45%, which is due to the fact that ddr5 memory module supporting chip is a product jointly developed by the company and partners, and the gross profit margin is lower than that of memory interface chip. With the increase of its revenue proportion, the average gross profit margin of interconnection chip product line has decreased.
We are optimistic about the improvement of memory interface chip market space and the expansion of new business such as Jinchuan server platform for a long time
Main increment of company growth = server shipments (1) × Number of memory modules (2) × [number of DB + memory supporting chips] (3) × Unit price (4) + PC application (5) + volume of Jinchuan server platform (6):
(1) global server shipments in the past four years CAGR = 7.4%. With the global data center construction maintaining a high boom, according to IDC’s prediction, global server shipments in the next four years CAGR = 9.3%;
(2) with the technical iteration, the number of CPUs and corresponding channels is increasing. At present, the number of server level CPUs has increased from 1 to 2-4, and the number of channels has increased from 6 to 12 at most;
(3) ddr5 sets need SPD + PMIC + TS 2, and SPD and PMIC developed by the company and partners can be used on the PC side;
(4) it takes an average of 18 months to replace DDR4, while it takes about one year from the occurrence of ddr54800 to 5600 and about 8 months from 5600 to 6400. The iteration speed of ddr5 is accelerated, which can ensure that the price of interface chip is more stable;
(5) within the range of affordable price, in order to solve the bottleneck of data transmission rate, the PC memory module in the later stage of ddr5 may be equipped with a CKD (PC compact RCD), and the application of interface chip in PC will improve the quality of its market space (refer to the global server shipment of about 13 million units and PC shipment of 340 million units in 21 years);
(6) the company’s performance of Jinchuan server continued to exceed expectations. The sales revenue of Jinchuan server platform product line in 2021 was 845 million yuan, an increase of 275092% over the previous year. The related party transactions with Intel in 20-22 years were 500 million yuan, 1.5 billion yuan and 2.5 billion yuan respectively. At the same time, the gross profit margin of 22q1 Jinchuan server platform was 12.44%, month on month + 1.01pcts, which is at a high level in the industry.
Investment advice
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.395 billion yuan, 1.911 billion yuan and 2.609 billion yuan, with corresponding P / E ratios of 47, 34 and 25 times, maintaining the “buy” rating.
Risk tips
The penetration speed of ddr5 memory interface chip is lower than expected, the competition in the server industry in which Jinchuan is located is intensified, the application of ddr5 memory interface chip in PC is lower than expected, and the technical route of retimer chip is uncertain.
