Will Semiconductor Co.Ltd.Shanghai(603501) announcement comments: increased holdings of Ingenic Semiconductor Co.Ltd(300223) , benign expansion of chip design platform

\u3000\u3 Shengda Resources Co.Ltd(000603) 501 Will Semiconductor Co.Ltd.Shanghai(603501) )

The company issued the announcement of increasing its holdings of Ingenic Semiconductor Co.Ltd(300223) shares: Shaoxing Weihao, a wholly-owned enterprise of the company, plans to increase its holdings of Ingenic Semiconductor Co.Ltd(300223) shares through centralized bidding or block trading, with a total investment of no more than RMB 4 billion. As of May 20, 2022, the company has held 3 Qiming Information Technology Co.Ltd(002232) 3905087 shares, accounting for 4.96% of Ingenic Semiconductor Co.Ltd(300223) total share capital. The cumulative number of Ingenic Semiconductor Co.Ltd(300223) shares held after this increase is no more than 50 million shares and no more than 10.38% of Ingenic Semiconductor Co.Ltd(300223) total share capital. This transaction shall be valid for 12 months from the date of deliberation and approval by the general meeting of shareholders of the company. During the above validity period, the company does not seek to control Ingenic Semiconductor Co.Ltd(300223) control 3 Qiming Information Technology Co.Ltd(002232) 020 the successful implementation of the acquisition of Beijing Sicheng in May, completed the construction of three brands: ISSI (memory), lumissil (analog and interconnect chip) and ingenic (intelligent video chip and microprocessor), and completed the technical distribution of "storage + simulation + interconnect + computing" Will Semiconductor Co.Ltd.Shanghai(603501) is optimistic about the long-term investment value of Ingenic Semiconductor Co.Ltd(300223) and decides to increase its holdings of Ingenic Semiconductor Co.Ltd(300223) for the purpose of strategic cooperation and complementary resources.

Cooperate in the development of vehicle chips and enable the global sales network Will Semiconductor Co.Ltd.Shanghai(603501) : Ingenic Semiconductor Co.Ltd(300223) memory chips are widely used in industrial and automotive applications. Vehicle memory chips can be used for many components in vehicle entertainment, engine control, body electronics, ADAS and other systems. ISSI brand memory is sold to international mainstream automobile Tier1, including Bosch, Delphi, Continental, etc 3 Qiming Information Technology Co.Ltd(002232) 021: the revenue of memory chips was 5.274 billion yuan, with a year-on-year growth rate of 142.9%, accounting for 68.2% of the total revenue and 83.8% of the overseas revenue Will Semiconductor Co.Ltd.Shanghai(603501) will deepen cooperation with Ingenic Semiconductor Co.Ltd(300223) in the vehicle electronics market, realize resource complementarity in the customer's product scheme and future technical direction, and help Will Semiconductor Co.Ltd.Shanghai(603501) continue to expand its global market share in the vehicle electronics market.

Security video chip extends to the consumer end: Ingenic Semiconductor Co.Ltd(300223) wholly owned subsidiary Hefei Junzheng is mainly engaged in the development of video codec technology and SOC chip products in the field of intelligent video. It is mainly used in security monitoring, intelligent doorbell, face recognition equipment and other fields, and has achieved a high market share in the field of consumer intelligent video chip Ingenic Semiconductor Co.Ltd(300223) already has 360, Mijia system, Haier, Lenovo, Logitech and other heavyweight consumer customers. In 2020, the global market share of Ingenic Semiconductor Co.Ltd(300223) webcam intelligent video chip was 16.7% Will Semiconductor Co.Ltd.Shanghai(603501) has a high market share and technology accumulation in the fields of mobile phone, vehicle and government security. It is expected to enter the security monitoring market of China's mainstream consumer end through Ingenic Semiconductor Co.Ltd(300223) and further improve the market position of the company's security video chip.

Investment suggestion: be optimistic about the strong alliance between the company and Ingenic Semiconductor Co.Ltd(300223) to accelerate the layout of global vehicle video chips and open the consumer security CIS market. Achieve good synergy with Ingenic Semiconductor Co.Ltd(300223) on the product and technology side. It is estimated that the operating revenue of the company from 2022 to 2024 will be 29.296 billion yuan, 36.792 billion yuan and 45.676 billion yuan respectively, with a year-on-year increase of 21.54%, 25.58% and 24.15%, and the net profit attributable to the parent company will be 5.514 billion yuan, 7.078 billion yuan and 8.450 billion yuan respectively, with a year-on-year increase of 23.19%, 28.36% and 19.38%. At present (May 23, 2022), it corresponds to pe2.66 billion yuan 31, 20.50 and 17.17 times, giving the company 35 times PE in 2022, corresponding to the target price of 220.15 yuan, maintaining the "buy" rating.

Risk tips: the risk of weak consumer electronics, the risk of slow resumption of automobile supply chain, the risk of epidemic spread, and the risk of deterioration of the international situation

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