\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 82 Maxscend Microelectronics Company Limited(300782) )
Key investment points
Event: the company released its 2021 annual report, and achieved a total operating revenue of 4.63 billion yuan, a year-on-year increase of 66.0%; The net profit attributable to shareholders of listed companies was 2.13 billion yuan, a year-on-year increase of 99.0%.
The company’s performance rose sharply and the module improved significantly. 2021: 1) revenue side: the company’s RF discrete device / RF module business achieved revenue of RMB 3.35/1.2 billion respectively, with a year-on-year increase of + 36.1% / + 332.7% respectively. 2) Profit side: gross profit margin of sales / net profit margin of sales are 57.7% / 46.1% respectively, with a year-on-year increase of + 4.9pp / + 7.7pp respectively. 3) Expense side: the company’s sales / management / R & D expense ratio was 1.0% / 1.1% / 6.6% respectively, with a year-on-year increase of -0.3pp / – 0.01pp / + 0.04pp respectively. In 2021, the company further increased the volume of RF discrete devices through upgrading iteration, and the receiver module quickly increased and continued to penetrate the client with good product performance and excellent delivery capacity.
The company has a high market share in the two pan SOI process devices of switch and LNA, and this leading advantage is expected to extend to lnabank and lfem receiving modules. The company has a high share of major Android customers. With the continuous improvement of 5g mobile phone penetration, the company’s SOI products are expected to benefit first and increase both volume and price. The company’s leading pan SOI RF technology is also expected to help its receiver module layout. Among the receiver modules, lnabank and lfem are dominated by SOI process. The company is expected to continue to improve and maintain the leading position of SOI dominated receiver modules by virtue of its years of accumulation and market share advantage.
The company continues to increase the investment in high-end filters, and the transmitter module is also expected to increase; The self built production line fabless is changed to Fab Lite to improve the sealing and testing capacity of RF SAW filter wafers and RF modules. The filter dominates the high-end receiving end and transmitting end modules, so it is necessary to focus on the layout of products for advanced high-end modules. Yole predicts that the total market size of IPD and SAW filters will be 5.93 billion US dollars in 2025, while the current localization rate is only about 3%. The company has a broad alternative market space. In addition, the company plans to invest 3.5 billion yuan in the self built Xinzhuo semiconductor project, which will expand the layout of the company’s saw filter and is expected to be put into operation this year, which will make full use of the company’s filter capacity at that time. PA is a necessary RF device for advanced transmitter module, and domestic manufacturers have fierce competition. In 2021h1, the company’s transmitter module 5gl-pamif has begun to promote sample delivery, and it is expected to ship in small quantities in 2022. With the perfect layout of PA and filter core devices, the company is expected to further penetrate the RF market.
Profit forecast and investment suggestions. It is estimated that in 22-24 years, the company’s EPS will be 6.79 yuan, 8.77 yuan and 10.15 yuan respectively. Considering that under the background of increasing the penetration rate of RF localization, the company is expected to improve the layout from module to module and from low-end to high-end, and superimpose the improvement of production capacity after the company’s transformation to Fab Lite, we give the company 40 times PE in 2022, corresponding to the target price of 271.60 yuan. For the first time, give a “buy” rating.
Risk tip: market competition intensifies, Sino US trade friction intensifies, and the epidemic situation leads to the deterioration of China’s supply chain, the lag of technology and process development, and the completion and production schedule of projects under construction may be less than expected.
