\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
Event:
The company released its annual report for 2021, realizing an operating revenue of 8.51 billion yuan, a year-on-year increase of 89.25%; The net profit attributable to the parent company was 2.337 billion yuan, a year-on-year increase of 165.33%; Net profit deducted from non parent company was 2.224 billion yuan, with a year-on-year increase of 300.48%. The company released the first quarterly report of 2022, realizing an operating revenue of 2.230 billion yuan, a year-on-year increase of 39.02%; The net profit attributable to the parent company was 686 million yuan, a year-on-year increase of 127.65%; Net profit deducted from non parent company was 655 million yuan, with a year-on-year increase of 136.51%.
Comments:
The company's performance grew rapidly and the profitability of MCU and storage business improved: the company achieved excellent performance in 2021, in which the operating revenue of MCU business was 2.456 billion yuan, with a year-on-year increase of 225.36%, and the gross profit margin was 66.36%, with a year-on-year increase of 19.51pct; The operating revenue of memory chip business was 5.451 billion yuan, with a year-on-year increase of 66.04%, and the gross profit margin was 39.71%, with a year-on-year increase of 4.92pct; The operating revenue of sensor business was 546 million yuan, with a year-on-year increase of 21.36%, and the gross profit margin was 24.13%, with a year-on-year decrease of 12.69pct. The enhancement of the profitability of the company's MCU and storage business has driven the overall gross profit margin of the company to increase by 9.16pct compared with the previous year, reaching 46.54%. 22q1 single quarter gross profit margin was 49.49%, and the boom continued.
Niche storage products have a perfect layout, and self-developed DRAM has brought new increment: the company has a layout in the three basic storage fields of norflash, slcnandflash and DRAM, and the product matrix is perfect. Norflash products of the company provide diversified product portfolio for the market, with a full range of products with 512KB to 2GB large capacity. 55nm advanced process technology has been mass produced across the board, and the shipment volume accounts for more than 40%. Nandflash products complete 1GB ~ 8GB mainstream capacity coverage and realize mass production at 38nm and 24nm process nodes. The DRAM products of the company achieved a breakthrough in its own brand in 2021, and mass produced the first 4gbddr4 product with 19nm process, which is widely used in consumer electronics, industrial security, network communication and other fields.
MCU business has grown brightly and its products have maintained a leading position in China: the company's MCU products have become the product line with the fastest performance growth, with a year-on-year increase of 225.36% in 2021. As a leading manufacturer of 32-bit MCU products in China, the company's MCU products have successfully produced 35 series and about 400 models of general-purpose MCU products, which can meet the functional requirements of high, medium and low-end products of different customers; Due to its good performance and reliability, similar products have certain competitive advantages in the market, and the brand value continues to improve. The core of products released and under development by the company covers armcortex-m3, M4, M23 and M33. It is also the world's first 32-bit general MCU product based on risc-v core, which has a competitive advantage in similar products in the market. In terms of process, at present, the company's products cover 110Nm, 55nm, 40nm and 22nm process, which is in a leading position in the industry.
Layout the industrial and vehicle regulation market, and the products move towards high-end: the company's storage and MCU product lines actively layout the industrial and vehicle regulation market, and improve the product competitiveness through more advanced processes and richer functions.
1) the company's vehicle specification flash products have been adopted in batches by many well-known automobile enterprises at home and abroad, and can provide products and solutions with high capacity, high reliability and excellent performance for on-board auxiliary driving system, on-board communication system, on-board information and entertainment system, battery management system, DVR, intelligent cockpit, T-box and other applications. The company's gd25 products fully meet the vehicle specification level aec-q100 certification, and the 2G high-capacity products of GD55 have also passed the certification. The 2MB ~ 2GB capacity of spinorflash vehicle specification products of the company has been fully paved, providing the market with national production vehicle specification flash products. The company's 38nmslcnandflash vehicle specification level products have been launched, together with vehicle specification level spinorflash, to provide more opportunities to enter the vehicle market.
2) the company continues to improve the ecological layout of MCU markets. In the industrial field, the company has mass produced motor drive chips, which can be used for electric tools, Siasun Robot&Automation Co.Ltd(300024) , industrial automation three-phase motors, etc. In the automotive field, in addition to the existing applications in the automotive aftermarket, the company's MCU products are steadily entering the vehicle regulation market and actively expanding their applications in the automotive field. At present, the company is actively promoting the mass production of 40nm vehicle specification MCU products, which have been streamed and tested by customers. The product will be mainly oriented to the general body market. In the wireless field, the company also launched wifimcu to realize the connection to IOT cloud.
3) in the DRAM direction, the company's 17nm DDR3 products are under active research and development as planned. In the niche market, the DRAM products of the company maintain the generation difference advantage in the process, which is conducive to reducing the product cost. The close cooperation between the company and Changxin storage provides stable production capacity guarantee for the company's DRAM products.
Profit forecast, valuation and rating: the company has maintained the leading position in China in the niche storage field, with strong demand for MCU products and rapid growth of business. At the same time, it has actively laid out the industrial and vehicle specification markets, and the product competitiveness has been improved. Therefore, we raised the company's net profit attributable to the parent company in 2022 and 2023 to 3.108 billion yuan (+ 14%) and 4.014 billion yuan (+ 8%), the original forecast was 2.736 billion yuan and 3.722 billion yuan, and added the performance forecast for 2024. We estimate that the company's operating revenue from 2022 to 2024 will be RMB 12.237/16.135/20.387 billion respectively, and the net profit attributable to the parent company will be RMB 3.108/4.014/4.976 billion respectively. The current market value corresponds to 27 / 21 / 17 times of PE, maintaining the "buy" rating.
Risk tip: the prosperity of MCU market is declining, and the R & D Progress of new process is less than expected.
