Sitway is a leader in cis security field and accelerates the expansion of downstream market

Steway (688213)

Key investment points:

Sitway is a leading security CMOS image sensor (CIS) enterprise and a leading emerging machine vision image sensor supplier. It focuses on the expansion of market share in the field of security and machine vision in the short term, and the downstream in the medium and long term, expanding to the medium and high pixel market of mobile phones and the field of automotive electronics.

The demand for security CIS is increasing, and the leader continues to benefit

According to Frost & Sullivan data, in 2020, the shipment and sales of security CIS will be 420 million pieces and 870 million dollars respectively. With the continuous expansion of the overall market scale of the security industry, it is expected that the shipment and sales will reach 800 million pieces and 2.01 billion dollars respectively in 2025, and the five-year CAGR will be 13.6% and 16.8% respectively; In 2020, the company ranked first in the world with 146 million security CIS chips, and the market share is expected to further improve.

The company takes the lead in stacked CIS technology and has established advantages in the field of machine vision

The stacked GS products based on BSI process are widely used in the emerging field of machine vision. According to Frost & Sullivan data, only Stevie, Sony and Howell have large-scale mass production capacity in the world; Sitway will ship 25 million stacked GS products in 2020, with a market share of 41.7%. We are optimistic that the company will become the leading enterprise of the segment track and enjoy the dividend of rapid development of the industry.

It has cut into consumption and automotive electronics, opening up new growth space

It has entered the field of automotive electronics and mobile phones through low-end CIS products, and medium and high-end products are in the stage of R & D, verification and market introduction; In March 2022, a 50 megapixel ultra-high resolution CIS product based on the 22nm process 3D stack BSI process was launched for high-end flagship mobile phones, and mass production is expected to be realized in Q3 in 22 years; In December 2021, CIS products for intelligent driving image application integrating ISP and TX were launched to enter the automotive afterloading market. The expansion of products and market provides guarantee for the expansion of revenue and profit scale.

Earnings forecast, valuation and rating

It is estimated that the company’s revenue from 2022 to 2024 will be RMB 4.054/56.57/7.189 billion respectively, with a year-on-year growth rate of 50.76% / 39.53% / 27.07% respectively, and the CAGR from 2022 to 2024 will be 33.17%; The net profit attributable to the parent company was 528 / 830 / 1153 million yuan respectively, with a year-on-year increase of 32.54% / 57.30% / 38.86% respectively, and the CAGR from 2022 to 2024 was 47.77%; EPS is 1.32/2.08/2.88 yuan respectively, corresponding to 43 / 27 / 20 times of 2022 profit forecast PE respectively. It is covered for the first time and will not be rated temporarily.

Risk warning: the production of raised investment projects is less than expected, the concentration of customers is high, the product R & D is less than expected, the downstream demand is less than expected, and the downstream expansion is less than expected

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