Key points
Event:
Will Semiconductor Co.Ltd.Shanghai(603501) intends to invest no more than 4 billion yuan in Ingenic Semiconductor Co.Ltd(300223) Will Semiconductor Co.Ltd.Shanghai(603501) ( Will Semiconductor Co.Ltd.Shanghai(603501) . SH) announced on May 22, 2022: Will Semiconductor Co.Ltd.Shanghai(603501) announcement on the increase of Ingenic Semiconductor Co.Ltd(300223) shares held by wholly-owned enterprises of the company and related party transactions: Will Semiconductor Co.Ltd.Shanghai(603501) wholly-owned enterprise Shaoxing Weihao enterprise management consulting partnership (limited partnership) plans to increase the shares of Ingenic Semiconductor Co.Ltd(300223) ( Ingenic Semiconductor Co.Ltd(300223) . SZ) by centralized bidding or block trading with no more than RMB 4 billion, And the cumulative number of Ingenic Semiconductor Co.Ltd(300223) shares held after the increase is no more than 50 million shares, no more than 10.38% of Ingenic Semiconductor Co.Ltd(300223) total share capital. The capital source of this transaction is about 40% of its own funds and about 60% of the funds raised by bank loans and other financing methods allowed by laws and regulations, which does not involve the use of raised funds.
At present, Will Semiconductor Co.Ltd.Shanghai(603501) has held Ingenic Semiconductor Co.Ltd(300223) about 23.91 million shares, accounting for 4.96% of Ingenic Semiconductor Co.Ltd(300223) total share capital of 482 million shares. As of May 22, 2022, in the past 12 months: (1) Will Semiconductor Co.Ltd.Shanghai(603501) participated in the subscription of Ingenic Semiconductor Co.Ltd(300223) shares issued to specific objects After the completion of Ingenic Semiconductor Co.Ltd(300223) non-public offering, Will Semiconductor Co.Ltd.Shanghai(603501) was allocated Ingenic Semiconductor Co.Ltd(300223) shares at the issue price of 103.77 yuan / share, with a total equity subscription payment of 54999998991 yuan; (2) Will Semiconductor Co.Ltd.Shanghai(603501) purchased 3 Allwin Telecommunication Co.Ltd(002231) 8604904 shares through centralized bidding in the secondary market, and paid a total equity purchase price of 151831520623 yuan, with an average price of about 81.61 yuan / share.
As of May 20, 2022, Will Semiconductor Co.Ltd.Shanghai(603501) has held Ingenic Semiconductor Co.Ltd(300223) 23905087 shares accumulatively, accounting for 4.96% of Ingenic Semiconductor Co.Ltd(300223) total share capital, and paid 206831519614 yuan for equity acquisition accumulatively.
Comments:
I. Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) form important strategic cooperation
(I) Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) will further strengthen business cooperation
Ingenic Semiconductor Co.Ltd(300223) 's main business and products, especially memory chips, have strong competitive advantages in the world, and its products have a broad market space. In 2020 and 2021, the revenue of Ingenic Semiconductor Co.Ltd(300223) memory chip products was 1.525 billion yuan and 3.594 billion yuan respectively, accounting for 70.30% and 68.15% of its main business revenue respectively. As an IC design enterprise with leading technology, its downstream customers are all oriented to the fields of automobile, industry, medical treatment, communication, etc., and can realize effective resource complementarity with Will Semiconductor Co.Ltd.Shanghai(603501) which is conducive to further strengthening business cooperation between Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) and .
In December 2020, Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) jointly established Shanghai Xinkai integrated circuit Co., Ltd. Relying on Beijing Sicheng's many years of flash design experience and technology accumulation, develop norflash products for the consumer market. In recent years, thanks to the characteristics of "execution on chip", norflash has been widely used in emerging fields such as 5g, TWS headphones, Internet of things and automotive electronics. We believe that norflash market is expected to usher in a period of rapid development and Ingenic Semiconductor Co.Ltd(300223) norflash business is expected to achieve significant growth.
The memory chip of Ingenic Semiconductor Co.Ltd(300223) has a good customer base in the automotive market, and Will Semiconductor Co.Ltd.Shanghai(603501) is the leading enterprise of global vehicle CIS. In the future, Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) will have great business strategic cooperation opportunities Will Semiconductor Co.Ltd.Shanghai(603501) and Ingenic Semiconductor Co.Ltd(300223) will deepen cooperation 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 market share in the vehicle electronics market.
In terms of analog products, Will Semiconductor Co.Ltd.Shanghai(603501) currently has many products in the field of consumer electronics, and the application fields related to industrial and automotive electronics are the markets that Will Semiconductor Co.Ltd.Shanghai(603501) is focusing on Ingenic Semiconductor Co.Ltd(300223) simulation and interconnection product line covers LED driver chip, touch sensor chip, DC / DC chip, vehicle microprocessor chip, Lin, can, g.vn and other network transmission chips, mainly for automotive, industrial, medical and high-end consumer markets Will Semiconductor Co.Ltd.Shanghai(603501) is expected to achieve common growth through cooperation and exchange with Ingenic Semiconductor Co.Ltd(300223) in subdivided technical fields and markets.
Will Semiconductor Co.Ltd.Shanghai(603501) continues to increase its holding of Ingenic Semiconductor Co.Ltd(300223) shares, which can strengthen its business strategic cooperation and realize positive effects such as resource complementarity and development strategy synergy.
(II) be optimistic about the development of Ingenic Semiconductor Co.Ltd(300223) in the medium and long term, and contribute investment income to Will Semiconductor Co.Ltd.Shanghai(603501) in the long term
Ingenic Semiconductor Co.Ltd(300223) has been deeply engaged in the independent design, R & D and sales of high-performance and low-power processor chips since its establishment. With the smooth implementation of Ingenic Semiconductor Co.Ltd(300223) acquiring Beijing Sicheng in May 2020, it has completed the construction of three brands: ISSI (memory), lumissil (analog and interconnection chip) and ingenic (intelligent video chip and microprocessor), and completed the technical distribution of "storage + simulation + interconnection + computing". As of December 31, 2021, Ingenic Semiconductor Co.Ltd(300223) has a number of core technologies in important chip fields, Ingenic Semiconductor Co.Ltd(300223) and its wholly-owned subsidiaries have 556 patent certificates, 136 software copyright registration certificates and 88 integrated circuit layouts Ingenic Semiconductor Co.Ltd(300223) on the basis of the original market of intelligent video chips and microprocessors, through the merger and acquisition of Beijing Sicheng, it has a product line of integrated circuit memory chips, analog and interconnection chips with high integration density, high performance quality and high economic value. The main products are SRAM, DRAM, norflash, embedded flash, analog analog chips, etc. they are widely used in the fields of automotive electronics, industry and medical treatment, communication equipment and consumer electronics.
With the trend of electric and intelligent automobile, the market prospect of automobile chip is broad. The storage demand of intelligent vehicles mainly comes from four fields: On-board Information and entertainment system (IVI), advanced driving assistance system (ADAS), on-board information system and digital instrument panel. With the improvement of intelligent driving, there will be more and more sensors used to collect vehicle operation and surrounding data, including cameras, radar, thermal imaging equipment, lidar, etc., and these sensors will produce a large number of data processing and storage requirements.
Ingenic Semiconductor Co.Ltd(300223) will usher in new development prospects in the era of intelligent driving.
The Japanese team has good knowledge in memory design, analog circuit design and other fields, and has good knowledge in the field of embedded circuit design, analog circuit design, and so on. In 2021, Ingenic Semiconductor Co.Ltd(300223) achieved an operating revenue of 5.274 billion yuan, a year-on-year increase of 143.07%, and a net profit attributable to shareholders of listed companies of 926 million yuan, a year-on-year increase of 116527%.
In the medium and long term, Ingenic Semiconductor Co.Ltd(300223) performance will conform to the market and show strong growth. With the gradual realization of Ingenic Semiconductor Co.Ltd(300223) performance, the overall valuation of Will Semiconductor Co.Ltd.Shanghai(603501) is expected to be improved, and Will Semiconductor Co.Ltd.Shanghai(603501) is expected to obtain certain investment income through investment in Ingenic Semiconductor Co.Ltd(300223) .
II. The valuation of the semiconductor industry is low, and the key recommendations are reiterated
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. We held a teleconference "sorting out investment opportunities in the semiconductor industry" on February 23, issued the "tracking report of the semiconductor industry - sorting out investment opportunities after the market crash" on March 10, held the "interpretation of the annual report and the first quarterly report of the science and technology industry" on May 12, and issued the "tracking report of the semiconductor industry - returning to work and production steadily on May 18, Reiterate our continued bullish on 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.
Looking ahead, we believe that the wave of domestic substitution and innovation will be an important driving force for China's semiconductor industry in the future. (1) Domestic substitution: in the field of upstream equipment, materials and parts, domestic manufacturers accelerate the introduction; Downstream end application customers actively introduce domestic chips, and semiconductor design companies continue to benefit. (2) Innovation wave: new energy applications such as smart cars and solar energy storage have increased the demand for vehicle specification chips and power semiconductors, and innovative applications such as aiot and VraR lead the development of the industry.
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.
III. investment suggestions
1. Semiconductor platform leading enterprises and ecosphere Enterprises: it is recommended to pay attention to Will Semiconductor Co.Ltd.Shanghai(603501) , Ingenic Semiconductor Co.Ltd(300223) , Gettopacoustic Co.Ltd(002655) .
2. Ddr5 industrial chain: some models of cpusapphirerapids in Intel server and data center have been shipped recently. Rambus company's 22q2 is expected to be 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) .
3. 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.
4. 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 has been continuously promoted, and the trend of automobile production and sales before low and after high 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).
5. Semiconductor design: (1) simulation: there is a huge space for domestic substitution. Some enterprises have strong entry into 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) , Ninestar Corporation(002180) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , etc. with high growth certainty.
6. 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.
7. 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) 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) . (2) 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) . (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.
