\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 460 Hangzhou Silan Microelectronics Co.Ltd(600460) )
On April 29, Hangzhou Silan Microelectronics Co.Ltd(600460) released the first quarterly report of 2022. The company achieved a revenue of 2.001 billion yuan, a year-on-year increase of 35.65%, and a net profit attributable to the parent company of 268 million yuan, a year-on-year increase of 54.54%; Deduct non net profit of 260 million yuan, with a year-on-year increase of 59.41%.
Q1’s performance reached a new high and the product structure was continuously optimized. Q1 company achieved a revenue of 2.001 billion yuan, an increase of 35.65% year-on-year and 1.47% month on month; The gross profit margin was 31.43%, with a year-on-year increase of 2.10pct and a month on month decrease of 2.68pct; The net profit attributable to the parent company was 268 million yuan, a year-on-year increase of 54.54%; Deducting non net profit of 260 million yuan, a year-on-year increase of 59.41% and a month on month increase of 25.00%. It is mainly due to the company’s continuous breakthroughs in high threshold markets such as automobile, communication and new energy, the continuous optimization of product structure, and the rapid growth of IPM, PIM, power management and MEMS sensors.
IDM’s advantages were highlighted in the downstream high boom, and the loss of the company’s 12 inch production line narrowed. At the end of the year 21, the company produced more than 36000 pieces in 12-inch month. We expect the monthly production capacity to reach 60000 pieces by the end of the year 22, leading the progress among IDM companies in China. With the continuous opening of production capacity, the company is expected to grasp the high prosperity of the downstream automobile and photovoltaic market and continuously improve the domestic share. In addition, according to the income and profit data of Shilan Jike, an associated enterprise, the revenue of Shilan Jike in Q1 reached 375 million yuan, an increase of 5.98% month on month, the net profit was – 21.71 million yuan, and the loss was further narrowed. It reflects that the company’s production capacity continues to climb, and its profitability continues to improve with the switching of product structure.
Shilan Jixin plans to build a new 12 inch production line with a higher total capacity. The company announced through the resolution of the 34th meeting of the seventh board of directors that it plans to invest 3.9 billion yuan to build the “annual output of 36 Csg Holding Co.Ltd(000012) inch chip production line project” through its subsidiary Shilan Jixin, with a construction period of 3 years. If the new 12 inch production line is successfully put into operation and the 60000 pieces / month production capacity of the joint venture Shilan Jike continues to climb, the total production capacity of 12 inches will reach 90000 pieces / month. This will consolidate the company’s leading advantage of IDM and lay a capacity foundation for the company’s long-term growth.
IGBT and other high-end products accelerated breakthroughs, and the downstream made efforts to the industrial and automobile markets. With the upgrading of the company’s production line from 6 inches to 8 inches and then to 12 inches, the company’s product structure is also continuously optimized. From the perspective of power products, it has gradually evolved from diodes and triodes in the early stage to MOS and IGBT, and the structures such as shielding gate and superjunction in MOS are also continuously optimized. In terms of downstream markets, in the past, the company used to occupy a high proportion of consumer electronics markets such as home appliances and mobile phones. At present, with the strong demand for automobiles and photovoltaic, the company is also ushering in the opportunity of domestic replacement of gold. For example, in terms of IGBT products, the motor drive module of electric vehicle owners with v-generation IGBT and FRD chips independently developed by the company has passed the test in many customers in China and has been supplied in batches to some customers, Moreover, the company is accelerating the construction of automobile grade and industrial grade power module capacity. It is expected that the proportion of industry, automobile and photovoltaic in the company’s revenue will continue to increase in the future.
Investment suggestion: we expect the net profit attributable to the parent company in 2022 / 23 / 24 to be RMB 1473 / 1953 / 2496 million respectively, and the corresponding current price (closing price on April 29, 2022) PE to be 40 / 30 / 24 times respectively. We are optimistic about the progress of high-end upgrading of the company’s products, the steady progress of IGBT, MEMS and third-generation semiconductor businesses, and the growth potential is more worthy of expectation. Maintain a “recommended” rating.
Risk tip: cyclical fluctuation risk of the industry; The risk that the technical iteration is not as expected; Risks of capacity climbing and customer development falling short of expectations
