\u3000\u3 Shengda Resources Co.Ltd(000603) 986 Gigadevice Semiconductor (Beijing) Inc(603986) )
Recently, the company released the annual report of 2021 and the first quarterly report of 2022: the revenue in 2021 was 8.51 billion yuan, a year-on-year increase of 89.25%, and the net profit attributable to the parent company was 2.337 billion yuan, a year-on-year increase of 165.33%; In the first quarter of 22 years, the revenue was 2.230 billion yuan, a year-on-year increase of 39.02%, and the net profit attributable to the parent company was 686 million yuan, a year-on-year increase of 127.65%.
Key points supporting rating
All business lines achieved good growth and significantly improved profitability. In 2021, the revenue of all business segments of the company achieved good growth, and the revenue of memory business reached 5.451 billion yuan, a year-on-year increase of 66.04%; The revenue of microcontroller business was 2.456 billion yuan, a year-on-year increase of 225.36%; The sensor business achieved a revenue of 546 million yuan, a year-on-year increase of 21.36%. In 2021, the gross profit margin was 46.54%, with a year-on-year increase of 9.16pct; The sales expense ratio was 4.32%, a year-on-year decrease of 1.72 PCT; The management expense ratio was 4.59%, with a year-on-year decrease of 0.18pct; The financial expense ratio was – 1.42%, a year-on-year decrease of 2.77 PCT. 1q22’s gross profit margin was 49.49%, with a year-on-year increase of 13.73pct; The sales expense ratio was 2.91%, with a year-on-year decrease of 0.78 PCT; The management expense ratio was 4.77%, with a year-on-year increase of 0.38pct; The financial expense ratio was – 1.36%, with a year-on-year increase of 0.88pct.
The MCU product line continues to grow rapidly. The company continues to evolve and enrich the positioning and connotation of “MCU department store”. At present, MCU products have been mass produced in 35 series and about 400 models, covering the needs of high, medium and low-end markets. The product structure, customer structure and market application continue to be optimized, and the sales proportion in the industrial field continues to grow, which is expected to be the same as that of consumer applications in 2022. The vehicle specification MCU products are advancing steadily. The 40nm vehicle specification MCU has been streamed and tested by customers, and will mainly face the general body market. The company is also planning high-performance MCU, mainly for mainstream industrial applications such as industrial automation, energy and power, security and fire protection. In addition, the company continues to improve MCU ecology and mass produce motor drive chips and power management chips. In 2021, MCU products achieved a revenue of 2.456 billion yuan, a year-on-year increase of 225.36%, and has become the product line with the fastest performance growth.
The self-developed DRAM is progressing smoothly, opening up new growth space. In the field of DRAM, the company has worked closely with Changxin storage. The first private brand DRAM product was mass produced in June 2021, and the research and development of 17nmddr3 is being promoted as planned. In the niche market, DRAM products of the company have obvious advantages of generation difference in process. The promotion of DRAM product line will bring new performance growth points to the company.
Valuation
Considering the strong downstream demand, adjust the company’s EPS for 22-24 years to 4.540/5.680/6.830 yuan, and the PE corresponding to the current share price is 28 / 22 / 18 times respectively, maintaining the “overweight” rating.
Main risks of rating
Production capacity supply is lower than expected; Downstream demand is lower than expected; DRAM product expansion was less than expected.
