Semiconductor valuation is low, and key recommendations are reiterated. After the control measures were taken in some regions in the middle of March 22, the Shenwan semiconductor index continued to decline, the individual stocks in the sector generally fell significantly, the market risk appetite decreased, and the industry valuation was at a historical low. On February 23, we held a teleconference “sorting out investment opportunities in the semiconductor industry” to fully value the semiconductor sector, on March 10, we issued the “tracking report of the semiconductor industry – sorting out investment opportunities after the market crash”, and on May 12, we held a meeting on the interpretation of the annual report and the first quarterly report of the science and technology industry, reiterating our continued optimism for the semiconductor sector. At present, the main viewpoints of the semiconductor industry are as follows:
The semiconductor sector has excellent performance and grasps the opportunities of domestic substitution and innovative application. As a sample of Everbright Securities Company Limited(601788) electronics industry, we integrated the constituent stocks of Shenwan electronics, CITIC electronics and Changjiang electronics. In 2021, the revenue of semiconductor sector increased by 36.3% year-on-year and the net profit attributable to parent increased by 112.8% year-on-year; 22q1 revenue increased by 22.3% year-on-year, net profit attributable to parent increased by 40.7% year-on-year, and the performance increased brightly. Overseas, TSMC Q1 revenue and gross margin exceeded the upper limit of previous performance guidelines, reflecting that the industry demand is still strong. With the continuous promotion of the resumption of work and production in Shanghai, the operation of semiconductor enterprises in the Yangtze River Delta is also expected to return to the right track. We expect that the following categories will still be in short supply in 2022: power management, AMOLED driver chips, analog chips, MCU in new energy / electric vehicles and industrial fields, WiFi chips in IOT fields, etc.
1. Ddr5 industrial chain: some models of cpusapphirerapids in Intel server and data center have been shipped recently. Rambus company’s 22q2 expectation is optimistic, with an estimated revenue of 128146 million US dollars, an increase of 29% ~ 47% month on month. While we are optimistic about the growth trend of Montage Technology Co.Ltd(688008) 22q2, we are also optimistic about the SPD supporting shipment trend of Juchen and Lanqi. It is suggested to pay attention to Montage Technology Co.Ltd(688008) , Giantec Semiconductor Corporation(688123) .
2. Power semiconductor: the demand for photovoltaic continues to increase, and the operating rate of photovoltaic modules continued to increase in May. The demand in the field of new energy continues to rise, and the driving power IGBT and high-voltage MOSFET maintain a high atmosphere. We judge that the relevant products are in short supply throughout the year. It is suggested to pay attention to: (1) power fabless: Starpower Semiconductor Ltd(603290) , Wuxi Nce Power Co.Ltd(605111) , East micro semiconductors, etc; (2) Power IDM: Hangzhou Silan Microelectronics Co.Ltd(600460) , Yangzhou Yangjie Electronic Technology Co.Ltd(300373) , Wingtech Technology Co.Ltd(600745) , Zhuzhou Crrc Times Electric Co.Ltd(688187) , etc.
3. Automotive semiconductor supply chain: from January to April 2022, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles was 1.35 million, with a year-on-year increase of 128%; The resumption of work and production of China’s automobile industry chain continues to advance, and the trend of automobile production and sales in 2022 is more clear. We propose to pay attention to the following suggestions: the 603 Starpower Semiconductor Ltd(603290) (IGBT), Hangzhou Silan Microelectronics Co.Ltd(600460) (IGBT).
4. Semiconductor design: (1) simulation: there is a huge space for domestic substitution. Some enterprises have strong access to major global customers, and the proportion of industrial control and vehicle specification products has increased. It is suggested to pay attention to Sg Micro Corp(300661) , 3Peak Incorporated(688536) , Wuxi Etek Microelectronics Co.Ltd(688601) ; (2) Special IC: the industry continues to be booming, so it is recommended to pay attention to Unigroup Guoxin Microelectronics Co.Ltd(002049) ; (3) Logic: it is suggested to focus on Amlogic (Shanghai) Co.Ltd(688099) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , etc. with high growth certainty.
5. Semiconductor equipment and materials: in 2022, the capital development support of China’s wafer factories continued to rise, and the production capacity expanded steadily. It is still in the business cycle. It is optimistic about the logic of domestic substitution of semiconductor equipment and materials in the medium and long term, and the long-term high-quality track. At present, the equipment industry is picking up. Recently, attention has been paid to undervalued and performance supported targets. Suggestions: (1) equipment: Naura Technology Group Co.Ltd(002371) , tuojing technology, shengmei Shanghai, Pnc Process Systems Co.Ltd(603690) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , etc; (2) Materials: Konfoong Materials International Co.Ltd(300666) , Thinkon Semiconductor Jinzhou Corp(688233) , Anji Microelectronics Technology (Shanghai) Co.Ltd(688019) , Hubei Dinglong Co.Ltd(300054) , etc.
6. Mobile phone semiconductor supply chain: mobile phone sales volume 22q2 continues to be under pressure, but with the gradual promotion of resumption of work and production, economic activities begin to recover. We expect mobile phone demand to rebound in the future, and the valuation of mobile phone related semiconductor enterprises has been at a historical low. (1) RF: in the context of 5g upgrade, Maxscend Microelectronics Company Limited(300782) continues to advance to the field of high-end modules, filters and Pa. it is recommended to pay attention to Maxscend Microelectronics Company Limited(300782) . (2) Optics: the high-end CIS pattern of mobile phones is stable, and the consumption of single car CIS in the era of ADAS and intelligent driving has doubled. It is recommended to pay attention to Will Semiconductor Co.Ltd.Shanghai(603501) . (3) The penetration rate of analog chips continues to increase. It is recommended to pay attention to Sg Micro Corp(300661) , Wuxi Etek Microelectronics Co.Ltd(688601) .
Risk analysis: the progress of localization is less than expected, the expansion of Wafer Factory is less than expected, and the technology research and development is less than expected.
