\u3000\u3 Guocheng Mining Co.Ltd(000688) 798 Shanghai Awinic Technology Co.Ltd(688798) )
Event:
1. The company released its annual report for 2021: in 2021, the company achieved a revenue of 2.327 billion yuan (a year-on-year increase of 61.86%), and a net profit attributable to the parent company of 288 million yuan (a year-on-year increase of 183.56%). Among them, in the single quarter of 2021q4, the company achieved a revenue of 666 million yuan (a year-on-year increase of 42.19% and a month on month increase of 11.92%), and a net profit attributable to the parent company of 93 million yuan (a year-on-year increase of 325.20% and a month on month increase of 26.12%).
2. The company released the report for the first quarter of 2022: in the single quarter of 2022q1, the company achieved a revenue of 595 million yuan (a year-on-year increase of 20.11% and a month on month decrease of 10.58%); The net profit attributable to the parent company was 58 million yuan (a year-on-year increase of 73.66% and a month on month decrease of 38.01%).
2022q1 performance meets expectations, and the product structure is increasingly optimized. The performance decline of 2022q1 company was mainly caused by the payment of equity incentive fees. After excluding the impact of share based payment, 2022q1 company realized a net profit attributable to the parent company of 99 million yuan (a year-on-year increase of 199.76% and a month on month increase of 6.74%). In terms of business, the revenue of audio power amplifier chip in 2021 was 997 million yuan (a year-on-year increase of 33.77%), accounting for 42.86% (a year-on-year decrease of 9.00 PCT); The revenue of power management chip was 803 million yuan (a year-on-year increase of 75.82%), accounting for 34.51% (a year-on-year increase of 2.74 PCT); The revenue of motor drive chip was 285 million yuan (a year-on-year increase of 124.86%), accounting for 12.26% (a year-on-year increase of 5.64 PCT); RF chips achieved a revenue of 184 million yuan (a year-on-year increase of 81.12%), accounting for 7.89% (a year-on-year increase of 0.84 PCT). In terms of three expenses, the company’s expense rate (excluding R & D) during 2021 was 10.89% (a year-on-year increase of 0.20pct), of which the expense rates of sales, management and finance were 5.45% (a year-on-year increase of 1.12pct), 5.63% (a year-on-year increase of 0.99pct) and – 0.19% (a year-on-year decrease of 1.91pct), and the expense rate during 2022q1 was 10.97% (a year-on-year increase of 2.30pct).
Domestic snow chip can be replaced by Changpo. According to IC insight, the global analog chip market will reach US $74.1 billion in 2021 and is expected to reach US $83.2 billion in 2022. Specifically, in the field of power management chips, the company’s prospectus shows that the market scale of China’s power management chips will be about US $13.2 billion in 2021, US $23.5 billion in 2025 and 14% CAGR in 20212025; In the field of motor drive chips, according to cirruslogic statistics, the global market scale of motor drive tactile feedback drive chips in 2019 was about 240 million US dollars. Since major mobile phone manufacturers chose to replace physical keys with linear motors, it is expected to reach 1 billion US dollars in 2024 and 33.03% CAGR in 20192024; In the field of RF front-end chips, according to the statistics of qyr Electronics Research Center, the global RF front-end market scale in 2021 is US $23.557 billion. With the continuous application of 5g, the RF front-end chip market is further expanded, and the global market scale is expected to reach US $27.221 billion in 2022; In the field of magnetic sensors, the global magnetic sensor market in 2021 was US $2.228 billion, and it is expected to reach US $2.425 billion in 2022; In the field of audio power amplifier chips, audio power amplifier chips have made breakthroughs in the direction of intelligence, energy saving and high efficiency. It is expected that the shipment volume will stabilize at 3.3 billion from 2022 to 2023. From the perspective of competition pattern, at present, the analog chip industry is monopolized by Ti, ADI and other overseas manufacturers. Domestic manufacturers such as Sg Micro Corp(300661) , 3Peak Incorporated(688536) , Shanghai Awinic Technology Co.Ltd(688798) , etc. are rising rapidly, and there is a wide space for domestic substitution.
Continue to increase R & D investment and inject momentum into the long-term development of the company. The company continued to increase R & D, with R & D expenses of 148 million yuan in 2022q1 (a year-on-year increase of 97.41%). By 2021, the company has 621 R & D personnel, accounting for 63% of employees, most of whom have master’s degree or above. The company has made remarkable achievements in research and development. In the field of audio power amplifier, the company has launched a number of 12 inch 90nmbcd high-voltage audio power amplifier products in China, successfully laid out medium and high-power application fields, and launched a new generation of sktunev5 algorithm; In the field of power management, the company has launched new product subcategories such as charger, LDO, DC / DC, LCD bias, load switch and MOS, forming a platform layout of power management chips; In the field of motor-driven chips, the company launched 4D tactile algorithm combined with hardware chips to realize the integration of software and hardware, and participated in the formulation and implementation of the first international standard for tactile feedback of mobile games jointly led by Tencent and Xiaomi; In the field of RF front-end, the company launched new products, including LNA bank, 5g SRS RF switch, btfem products, etc. At the same time, the company’s products have gradually penetrated into many market fields such as aiot, industry and automobile, and have been applied to Byd Company Limited(002594) , Hyundai, Wuling, Geely, Chery and other terminal vehicles through module manufacturers. The company has sufficient growth momentum.
Profit forecast and investment rating: Shanghai Awinic Technology Co.Ltd(688798) is a leading analog chip enterprise in China. At present, it has completed the layout of five product lines of “acoustic photoelectric shooter”. At present, more than 800 products are on sale, covering 41 product subcategories. Based on the mobile phone market, the company continues to expand emerging fields such as industry, aiot and automobile, and has entered the supply chain of many international well-known brands such as Samsung, Byd Company Limited(002594) , Hyundai and Google. The company’s underlying technology is highly extensible. With the continuous breakthroughs in product technology and customers and the superposition of domestic alternatives, the company is expected to rise rapidly. We expect that the net profit attributable to the parent company from 2022 to 2024 will be RMB 424 / 635 / 897 million respectively, and the corresponding EPS will be RMB 2.56/3.83/5.40/share respectively. The corresponding PE valuation of the current stock price will be 53 / 36 / 25 times respectively. It will be covered for the first time and given a “buy” rating.
Risk warning: the downstream demand is less than the expected risk; Risk that the company’s new product R & D progress is less than expected; Risk that the progress of customer import is less than expected; The risk of intensified industry competition; Risk of epidemic rebound.
