\u3000\u3 Guocheng Mining Co.Ltd(000688) Huatai Securities Co.Ltd(601688) 601)
Events
Wuxi Etek Microelectronics Co.Ltd(688601) released the report for the first quarter of 2022: the company achieved an operating revenue of 265 million yuan in Q1 of 2022, with a year-on-year increase of 59.32%, a net profit attributable to the parent company of 66 million yuan, with a year-on-year increase of 171.99%, and a net profit attributable to the parent company of 62 million yuan after non deduction, with a year-on-year increase of 187.64%.
Key investment points
Q1 is close to the upper limit of the guidelines, and the performance continues to increase month on month
It is estimated that the company’s Q1 revenue in 2022 will increase by 33.11% month on month, the net profit attributable to the parent company will increase by 48.92% month on month, and the net profit attributable to the parent company will increase by 74.65% month on month after deduction.
In terms of gross profit margin, the overall gross profit margin of 2022q1 company was 44.71% (year-on-year + 13.7pct, month on month + 2.44pct); In terms of period expenses, the expense rate (excluding R & D) during Q1 in 2022 was 6.89% (year-on-year -0.65pct), of which the sales expense rate was 4.03% (year-on-year -1.18pct), the management expense rate was 2.62% (year-on-year -0.35pct), and the financial expense rate was 0.24% (year-on-year + 0.8pct). In addition, in 2022q1, the company’s R & D expenses were 25.11 million yuan (year-on-year + 118%), and the R & D expense rate reached 9.48%.
Deep ploughing power management track, the increase of Chinese customer share + large-scale driven growth in new application fields. In the field of deep ploughing power management for nearly 20 years, the performance indicators of main power conversion chips and power protection chips have reached or exceeded the international and Chinese bidding products. Adhering to the key customer strategy for many years, it officially entered the supplier system of Samsung Electronics in 2010, gradually formed a good market reputation, and passed the certification of mainstream consumer electronics brand suppliers such as Xiaomi and LG. At present, the penetration rate of the company’s products in China’s mobile phone brand is still at a low level, and it is expected to gradually increase its share with outstanding performance and stable quality in the future.
At the same time, the company actively expands the new application scenarios of new products, including DCDC, ACDC, PD fast charging chip and signal chain. The product application field is also gradually expanded from mobile phones and wearable devices to home appliances, automotive electronics and other business segments. In the field of household appliances, the company’s products have been successfully sold to Haier, Little Swan, Hisense and other brand enterprises, and in the field of automotive electronics. The company’s products include power management chips and tire pressure sensor operational amplifier products applied to the front mounted entertainment system of automobiles. At present, they have been shipped in small quantities.
The policy promotes the quantity of electronic detonators, and the company’s performance is very flexible
The Ministry of industry and information technology requires to strictly implement the policy of reducing and replacing industrial detonators with industrial digital electronic detonators, and comprehensively promote industrial digital electronic detonators. In addition to retaining a small amount of production capacity for export or other permitted special purposes, the production of industrial detonators other than industrial digital electronic detonators shall be stopped before the end of June 2022 and the sales of industrial detonators other than industrial digital electronic detonators shall be stopped before the end of August 2022. Saimi Kentuo, the holding subsidiary of the company, is an overall solution provider of electronic detonator module and electronic control system of related initiating explosive devices in civil explosion industry. It has launched various models of electronic delay chip and module of civil explosion digital electronic detonator, initiation control system, supporting equipment of production line, testing equipment and other products, as well as control chip and system equipment for a new generation of artificial weather rocket, electronic module and equipment for seismic wave exploration Chip module and control equipment for oil and gas well exploration. At present, it has reached cooperation with many mainstream civil explosive enterprises and successfully explored overseas markets. Its products are exported to South America, Africa, Australia, South Asia, Russia and other places.
We believe that the company’s deep cultivation of power management chips for 20 years and its entry into Samsung’s supply chain has proved its product competitiveness. In the future, with the increase in the proportion of Chinese brand customers and the large volume of new products and new applications, it is expected to continue to increase its performance. At the same time, the amount of electronic detonators driven by the benefit policy will also bring sufficient flexibility to the company’s performance.
Profit forecast
It is predicted that the revenue of the company from 2022 to 2024 will be 1.244 billion yuan, 1.674 billion yuan and 2.152 billion yuan respectively, and the EPS will be 5.20, 7.00 and 8.87 yuan respectively. The corresponding PE of the current stock price will be 25, 19 and 15 times respectively, maintaining the “recommended” investment rating.
Risk tips
Downside risk of industry prosperity, risk of product R & D progress falling short of expectations, risk of intensified industry competition, risk of overseas policy changes, etc.
